Discount Supermarket Aldi Heir Steps Out of the Shadows

In an exclusive interview, the heir of Theo Albrecht, who founded the discount supermarket chain Aldi, discusses the family feud being waged with his sister-in-law Babette and how he is protecting the €50-billion business from the family.
A rare exchange with the reclusive Mr. Albrecht.

This is a first. Theo Albrecht Jr., co-owner of Aldi Nord and one Germany's richest people, has never given an interview before. The family is normally intensely private. But at the moment, it is in the midst of a bitter feud, and, for the first time, he has gone public to make his position clear.

Although he makes regular appearances at the company and has his own office on the fourth floor of the Aldi Nord administrative HQ in Essen, Mr. Albrecht is viewed as a phantom. The only publicly available photo of him is believed to be about 20 years old. There is a reason why he shuns publicity: His father, Theo, was kidnapped and held for 17 days in 1971.

U.S. magazine Forbes lists the heirs of the deceased founder of Aldi, with an estimated fortune of €18 billion ($20.1 billion), in second place among German billionaires. Theo Albrecht Jr. has never given an interview before, just as his father never gave an interview. But when Handelsblatt correspondent Florian Kolf was on a recent visit to Aldi headquarters, he was told that Mr. Albrecht had decided to grant the newspaper an exclusive interview, on the condition that the reporter takes his own notes, instead of recording the interview.

And so, after the terms had been agreed, the white-haired, bespectacled 66-year-old suddenly walked into the conference room, wearing a  dark blue blazer, light blue shirt and blue tie. He spoke with striking candor about the feud in his family.

 

Handelsblatt: Mr. Albrecht, what is the dispute with your sister-in-law about?

I am not quarreling with my sister-in-law. I am defending my brother and the charter of the foundation. That's why my sister-in-law didn't sue me but the foundation supervisory authority, which approved the new charter. The purpose of the charter is to protect the company from too much family influence. That's what I'm fighting for.

But the family was originally in the majority in all three foundation boards. Why was this changed in 2010?

After my father's death, we had to change of way of thinking. Berthold and I were concerned about whether everything was still being properly handled, given the change in circumstances. And then we updated the foundation charters together.

The administrative ruled that the amendment of the charter had not been properly done, from a formal standpoint. Did you overlook this sore point?

From our perspective, there is no sore point in relation to the 2010 amendment of the charter. We are convinced that everything was done correctly. My brother would be turning in his grave if he knew what was happening here.

 

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Your sister-in-law claims that you did not have a good relationship with your brother, and that you short-changed him with the charter amendment.

I don't understand that claim at all. My brother and I made the changes at the Jakobus Foundation and the Lukas Foundation at the same time, just as we had done with earlier charter amendments. Our goal was always to ensure that the charters of all three foundations remained synchronized, so that they could perform their coordinated activities for the company as easily as possible.

… and the relationship with your brother?

It isn’t true that Berthold and I were quarreling. Our offices were next to each other, and we got along very well. My sister-in-law's false claim that there was a dispute between my brother and me is merely intended to distract from the fact that she is actually campaigning against her own husband. My sister-in-law and her children refuse to recognize what Berthold arranged in his will and in the foundation charter.

But you had had less personal contact with your brother more recently?

I didn’t like the way my sister-in-law led her life. That affected my personal contact with my brother.

Are the net €25 million annual payments from the foundation, which your sister-in-law's family has approved, truly a threat to the company, given the fact that its assets are in the billions?

Yes, because they can damage the company’s reputation. My sister-in-law's behavior in public, which is sometimes embarrassing, as well as the many lawsuits she is involved in, are a burden for our company. All of this is only possible because she and her children have had so much money paid to themselves.

But you yourself offered your sister-in-law and her children an annual payment of €25 million from the Jakobus Foundation.

That was a settlement offer, the goal of which was to put an end to pending litigation and get our company out of the headlines – under two conditions. First, it was tied to the condition that the company continues to do well financially. Financial support for the family can only be provided if the company is thriving. Second, she was supposed to agree to bring the rules imposed by Berthold into effect in the foundation board, and to stop ignoring the company representatives.

If the old rule really remains in place, the children of Berthold, together with their lawyer, could lead this company around by the nose. This would give them unlimited potential to blackmail the company, because no payments to the company, such as for foreign expansion plans, could be made without their consent. Theo Albrecht Jr, Aldi heir

Have Berthold's heirs already made decisions in the foundation board that oppose the will of company representatives?

The company representatives haven't been consulted at all yet. No resolutions at all have been made with the involvement of the two company representatives. The two family members on the board have made decisions on their own, which they were not permitted to do legally. But because they have the power to represent the foundation alone, they simply did it.

In your view, what exactly is the threat to Aldi Nord?

If the old rule really remains in place, the children of Berthold, together with their lawyer, could lead this company around by the nose. This would give them unlimited potential to blackmail the company, because no payments to the company, such as for foreign expansion plans, could be made without their consent.

What exactly is the role of the foundations?

The purpose of the foundations is to provide the necessary liquidity, so that the company can perform its duties and live up to its obligations. The company depends on the capital from the foundations for its expansion abroad, to modernize stores and invest in the future.

But there are still two other foundations with billions in capital. If necessary, they could provide all the financing.

No, they couldn't. Under the family agreement, all payments from the foundations to the company require the approval of all foundations. No foundation can overrule the others, and no foundation can act alone.

Wouldn't it have been a better solution to establish only one foundation?

You would have had to ask my father that question. But the system with the three foundations would work if all family members always placed the company above everything else.

Wouldn't it be better for you to approach your sister-in-law and the children, and attempt to resolve the matter peacefully, instead of in court?

You overlook the fact that my sister-in-law and her children are the aggressors. Besides, I don’t feel that I am in a position to make decisions about my brother's will and the rules he created in the foundation charter.

What exactly is at stake, and why does the company need capital from the foundations in the near future?

Our store network in France is urgently in need of renovation, and stores in Denmark also need to be modernized. The modernization of stores in Germany is complete, for now, but those stores also need to be constantly updated. Standing still means falling behind.

Where do you see your chances of having the higher administrative court uphold the amendment of the charter of the Jakobus Foundation made by your brother?

This is about the future of the company. My confidence in the rule of law remains unbroken.

What will you do if you do not prevail in the higher administrative court?

That would be a ruling contrary to my brother's last will. I can't imagine it.

 

Florian Kolf leads a team of reporters covering the retail, consumer goods, luxury and fashion markets. To contact the author: [email protected]