Competition Authority investigators have raised the offices of supermarket chain Shufersal and of food company Strauss Group. The investigators have seized documents and other materials and questioned senior managers at the two companies, including Shufersal CEO Itzik Abercohen. Victory supermarket chain owner and CEO Eyal Ravid has also been giving evidence to the Competition Authority. As far as is known, Victory is not suspected of any offence.
A notification by Shufersal to the Tel Aviv Stock Exchange states, "This morning, investigators on behalf of the Competition Authority carried out a search at the company's offices and took documents and computer equipment, and the company's CEO was questioned at the Competition Authority's offices. In the search warrant presented to the company it was stated that the search is in connection with suspicion of a cartel. At the time of this notification, the company has no additional information about the substance of the investigation and its circumstances."
In its notification to the stock exchange, Strauss states, "The company wishes to give notice that this morning, 9 November, 2021, representatives of the Competition Authority carried out a search and collected materials at the company's offices in connection with suspicion of offences under the Economic Competition Law, and that company employees were questioned, among them senior company officers."
The Competition Authority said in a statement, "The Competition Authority has opened an investigation and is examining the suspicion of breach of the Competition Law by a number of suppliers and retail chains following recent events. Since the investigation is only at the beginning, no further details can be disclosed at this stage."
Responses by the companies to the report have not yet been received.
Strauss is one of the largest food suppliers in Israel. In its financial statements for the second quarter of this year, the company said that it was examining the possibility of raising the prices of its products. Since Shufersal is a dominant player on the retail side, it could be that the investigation concerns possible collusion between the companies on raising consumer prices.
The Food Law of 2014, which was enacted in response to the social protests that took place in Israel, explicitly regulates the relationship between suppliers and retailers in the food market and sets specific limitations that are suspected of having recently been breached by the companies.
Shufersal has a long history of entanglements with the Competition Authority. Its former CEO Effie Rosenhaus was convicted of cartel offences and served a short jail sentence after it was found that he had acted with large suppliers to thwart sales bargains at rival chain Mega.
Over the years, Shufersal has carried out several acquisitions that have increased its market power, from Clubmarket fifteen years ago to New Pharm in 2017. Shufersal is currently in negotiations to buy the Kravitz books, stationery and home computer equipment chain.
Published by Globes, Israel business news - en.globes.co.il - on November 9, 2021.
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