Restraint of Trade Commissioner Dr. Yoram Turbovitz today (Sunday), approved, subject to various conditions, the formation of a joint Tnuva-Osem ice-cream company. The terms of the transaction provide that Osem and Tnuva will found a new corporation, in which Osem will hold 51% and Tnuva 49%. Investment in the corporation will amount to $27 million.
The corporation will acquire Tnuva’s equipment and ice-cream plants activity. At the same time, Osem and Tnuva undertake to make available to the partnership an owners loan of $29 million. The new company will engage in the manufacture, marketing and distribution of ice-cream products, while at the same time researching and developing new products.
Turbovitz decided in favour of the new corporation, even though, according to him, it could be harmful to competition, could deter the entry of potential competitors into the sector and could result in conglomerate usage by the two entities. Even though the two companies do not compete with the same products, it is a significant fact, according to Turbovitz, that both groups operate in the foodstuffs sector, and both have ramified marketing systems, serving the same target population of foodstuffs chain-stores and retail outlets. The Commissioner moreover stated that in future, the two might come to compete in overlapping fields, if , for example, Osem decided to go into dairy treats, in which Nestle, the controlling shareholder, has a great deal of know-how and experience.
Turbovitz’ decision to approve the deal was based on figures whereby Tnuva’s position in the ice-cream field is deteriorating, and its market share is declining compared with the growing share of Strauss, which Unilever has joined as a partner. Also, according to Turbovitz’ information, Strauss presently holds 50% of the ice-cream market, while Tnuva, through Tene Noga and Snowcrest, holds only 25%. The Israeli ice-cream market is estimated at NIS 550 million annually, of which import represents 55%.