West Germany: The Egg Man

Price wars are a way of life for Fritz-Karl Schulte, 40, a leader among the restless breed of West German entrepreneurs who have cut consumer costs by introducing modern production and merchandising methods. One of the first things he did when he took over his father’s struggling knitting mill in 1956 was to begin selling seamless nylon stockings in supermarkets for 750 a pair−half the standard price. Today, every other pair of women’s hosiery sold in West Germany is made by his firm, Schulte & Dieckhoff, whose sales have increased twentyfold in the past nine years, to $90 million.

Certain Invasion. After pulling up his stocking sales, bull-necked (collar size: 18 plus) Schulte built a shirt factory in Italy, where labor costs are lower, supplied it with nylon material from his German mills. Last year he began sending tens of thousands of men’s dress shirts to West German shops at prices ranging from $1.50 to $2, less than half the price that other shirtmakers asked. In the resulting price war, retail shirt prices fell as low as $1 and dozens of smaller competitors went out of business. Schulte has collared a quarter of West Germany’s $200 million shirt market.

Schulte’s Italian plant and six factories scattered throughout Germany daily produce 1,100,000 pairs of women’s stockings, 150,000 pairs of socks, 100,000 shirts and 40,000 women’s tights. Yet Schulte is busy finding new areas to which he can apply his cost-cutting tactics. He is building in the Ruhr Valley a multimillion-dollar plant that the West German sweater industry is convinced will soon be producing tens of thousands of low-cost synthetic sweaters every day. Result: the $375 million industry is mobilizing for almost certain invasion and a price war.

Efficient Hens. As if that were not enough, Schulte is also taking on the German farmer, one of the country’s most powerful political blocs. Tempted by the backward production and marketing practices of egg producers, he bought a chicken farm last February and started applying his methods to the hens. By installing automatic feed conveyor belts and coop cleaning machinery, Schulte has sharply reduced his work force. He has built up a flock of 80,000 hens that lay as many as 50,000 eggs a day−thus making himself West Germany’s largest egg producer.

This time, instead of cutting prices, Schulte is selling his “dew-fresh” eggs at 60 to 90 more per dozen than his competitors. His gimmick: stamping the laying date on each egg, rushing the eggs to stores by the following morning and guaranteeing their freshness. “My method means sales ten times as great per worker as in the textile industry,” he says. “It shows how ridiculous it is to talk about agriculture’s not being profitable.” Germany’s notoriously inefficient small farmers and egg distributors look at such ingenuity differently−as unfair competition. They are clamoring for legislation in the Bundestag that will limit Schulte’s activities in agriculture.