The frugality feud tearing apart the Aldi family

A rare image of Theo Albrecht Jr.

A rare image of Theo Albrecht Jr.

Intriguing tales of kidnapping, paranoia and obsessive frugality have emerged during a bitter feud that continues to engulf Germany’s richest family.

The notoriously private Albrecht family behind supermarket behemoth Aldi has been thrust into the spotlight courtesy of the ongoing fight over one family member’s spending habits.

Furious over his sister-in-law’s refusal to reign in her spending, family patriarch Theo Albrecht Jr broke his family’s obsessive code of secrecy earlier this year when we went to the press, declaring: “The name Albrecht requires a modest lifestyle”.

Founded when brothers Theo and Karl Albrecht took over their mother’s grocery store in 1946, Aldi (Albrecht Discount) has an annual turnover of $77 billion – thanks largely to its penny-pinching policies.

Theo Albrecht Jr has scandalised Germany by going public with the feud. Photo: Getty

Babette Albrecht (right) is accused of flouting the family rules. Photo: Getty

But that ethos is now allegedly being threatened by the widow of Theo’s son, who is accused squandering millions of dollars a year on art and vintage cars.

The Aldi story

Theo and Karl Albrecht split the company into Aldi Sud and Aldi Nord in 1960 after a dispute over whether to start selling cigarettes.

Theo took Aldi Nord, which now operates in former East Germany and European countries such as France and Belgium. Aldi Sud is responsible for Australia. For those playing at home, Australian Aldi stores still don’t sell cigarettes.

Theo Albrecht took over Aldi Nord after a falling out with his brother Karl.

Theo Albrecht took over Aldi Nord after a falling out with his brother Karl.

Theo Albrecht, who died a recluse in his hometown Essen in 2010, was known for two things: intense privacy and extreme frugality.

His privacy concerns are often traced back to 1971, when he was kidnapped and held for a ransom of $7 million.

Incredibly, Albrecht managed to convince the German tax man to deduct the ransom as a business expense.

Clearly disturbed by the incident, Albrecht shut-up shop as far as the media was concerned. The last image released of him was the day after the kidnapping, to help with the search.

The original Aldi store in Essen, Germany, 1930. Photo: Getty

The original Aldi store in Essen, Germany, 1930. Photo: Getty

After returning from his kidnapping, Albrecht was said to become extremely paranoid about being followed, and reportedly asked his armoured vehicle to take a different route to work everyday.

Stinginess was ‘unsustainable’

It might have been thriftiness that helped the brothers build the company to what it is today, but what happens to your spending habits once you’re worth billions of dollars?

The public spat between Theo Albrecht’s son Theo Jr and his dead brother’s wife, Babette Albrecht, examines just that.

When Theo’s brother Berthold died of cancer in 2013, Theo began trying to remove Babette and her five children (including quadruplets) from their controlling role in the trust.

For years, Aldi refrained from selling fresh goods to keep costs down. Photo: Getty

For years, Aldi refrained from selling fresh goods to keep costs down. Photo: Getty

According to Bloomberg, Babette and the kids receive $36 million every year from the trust.

Theo Jr thinks that’s too much, and has publicly admonished his sister in law for spending millions on vintage cars and art.

In a 2014 letter to Babette, Theo Jr wrote that she was “a burden on our company” for refusing to “subordinate [her] private lifestyle to the interest of our group”.

Even the name's of Babette's children have been closely guarded by the family. Photo: Stefan Anker

Even the names of Babette’s children have been protected. Photo: Stefan Anker

A former Aldi employee noted that Babette’s spending was hardly surprising – it was just at odds with the older generation’s extreme frugality.

“It’s totally natural that the younger generation would react against the excessive thriftiness,” said Eberhard Fedtke, a former Aldi Nord manager and author of a 2011 company history called Aldi Stories.

“The parsimony was so extreme, it was unsustainable.”

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