The Antitrust Authority's questioning of Tnuva Food Industries Ltd. chairwoman Zehavit Cohen last night was held under caution, sources inform "Globes". The investigation under caution concerns the suspicion that Tnuva deliberately concealed information from the Antitrust Authority, which is considered a criminal offense.
"Globes" has also learned that Cohen was investigated for concealing the McKinsey report, among other things. The Antitrust Authority also suspects that Tnuva concealed information about individual commercial agreements with marketing chains.
As "Globes" reported in June 2011, Tnuva adopted a policy of raising prices in order to quickly raise the company's value, following a research study conducted by the McKinsey consulting firm, which found that Tnuva could raise prices of certain products without hurting demand.
According to sources at Tnuva, including former employees, when Tnuva was acquired by Apax, its managers were required to present a "100-day plan" in which they were to detail how the company could raise its value within 100 days. The plan was nicknamed, "Quick Wins".
Meanwhile, the McKinsey consulting firm and Tnuva head economist Dr. Shula Pesach prepared a market study.
"Apax hired McKinsey to examine Tnuva's pricing capabilities. The study that McKinsey conducted, in coordination with Dr. Pesach, concluded that there was solid enough demand for cottage cheese, hard cheese and white spread cheese, that Tnuva could raise prices at least 15% without hurting sales.
"Even before the rise in raw milk inputs, it was clear that Tnuva was going to continuously raise prices," sources at Tnuva told "Globes". They said that, despite the study, Dr. Pesach warned that raising prices could "blow up in the company's face".
Between 2008-2011, the price for HaEmek hard cheese, under supervision (and is therefore an indicator of change in raw milk prices), remained unchanged, since the rise in price offset the fall in 2009. By contrast, prices of cottage cheese, hard cheese and spread cheese, products not under supervision, rose, even as prices of the raw materials fell worldwide.
So, between 2008-2011, the price for HaEmek hard cheese not under supervision rose 11.5%, the price for Tnuva's spread cheese rose 15.4%, and cottage cheese prices rose 11%. (These statistics were taken from marketing chains in Israel and are based on Tnuva's price list.)
Published by Globes [online], Israel business news - www.globes-online.com - on September 26, 2011
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