Sources inform ''Globes'' that the Antitrust Authority has questioned under caution several executives of Central Bottling Company Ltd. (Coca-Cola Israel). The Antitrust Authority is investigating the company on suspicion of abusing its monopoly power in the beverages market and violating the restrictions imposed on it as a monopoly. The company is suspected of seeking to promote sales of Tara Dairy by offering discounts on its flagship brand - Coca-Cola.
Coca-Cola Israel's president is Ronnie Kobrovsky and its CEO is Itzik Tamir
When Coca-Cola Israel was declared a monopoly, one of the restrictions placed on it was a ban on making the sale or delivery of products subject to buying other company brands.
According to Storenext data obtained by "Globes", Coca-Cola Israel has an 89% share of the Israeli soft drinks market in financial terms, with NIS 481 million in sales out of the total market of NIS 540 million. The company's Prigat juices brand is the second most popular brand in the country, and Cola Zero is the third most popular brand.
Criticism against the Antitrust Authority is growing, with former top retail executives accusing it of helping make Coca-Cola so powerful. "The Antitrust Authority gave Coca-Cola Israel its power. The moment the company acquired Tara, the regulator should have made sure to completely separate the two companies. It should have been banned from making joint sales, and complete separation of the businesses, managements, and accounting should have been required. In practice there are two companies: Coca-Cola Israel, which is very strong; and Tara, which is very weak. Under these circumstances, the natural and moral thing to do is, 'Help us with Tara, and we'll help you somewhere else.' Everyone understands this," said a former retailer.
Another retail executive said, "Coca-Cola Israel acquired Prigat, Neviot bottled water, Beer importer Rubin, Tara, and Tavor Winery. The Antitrust Authority erred when it allowed a major supplier to acquire companies in its area of business and turn them into giants. It's not just Coca-Cola. A lot of mistakes were made. Osem Investments Ltd. (TASE: OSEM) hasn’t acquired the entire planet Froumin, Sabra Salads, Materna infant formula, Beit Hashitta, Asis, and Tivall? The consumer is familiar with Osem pasta and Bamba, but there are 8-10 companies that it's acquired over the years."
Published by Globes [online], Israel business news - www.globes-online.com - on February 13, 2014
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