
Frenchman Wenger fielded a completely new lineup to the team that beat Tottenham Hotspur in last weekend's north London derby, with starts handed to Olivier Giroud, Jack Wilshere and Danny Welbeck.
But the Gunners succumbed to a 62nd-minute penalty from Sehrou Guirassy after the French striker tumbled to ground inside the area under a challenge from Mathieu Debuchy.
Will be hard to stop City, admits Wenger
Cologne, winless through 12 Bundesliga matches this season, climbed to second with one match to play, as a 0-0 draw between BATE Borisov and Red Star Belgrade in Belarus confirmed Arsenal's status as group winners.
"We've lost a game in which Cologne had one shot on goal other than the penalty," said Wenger. "We were always missing that little something to get the goal. Cologne defended with spirit and for them it's turned out to be the perfect night."
Arsenal one win away from qualification
Seven-time European champions Milan wrapped up first place in Group D with a 5-1 win over Austria Vienna at the San Siro.
Christoph Monschein put the visitors ahead in Italy, but Vincenzo Montella's team roared back with Andre Silva and Patrick Cutrone both netting twice along with a goal from Ricardo Rodriguez.
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