In the middle of the blazing summer, the Antitrust Authority has allowed Osem-Nestle, one of the two main players in the Israeli ice cream market, to distribute Haagen Dazs brand ice cream, owned by General Mills. Following this approval, Osem-Nestle subsidiary Noga Ice Cream, which manufactures and distributes Nestle ice cream, will begin exclusive distribution of Haagen Dazs ice cream.
The exclusive distribution services that Noga Ice Cream will provide to General Mills include logistic management of transporting the product to the customer, formulating and managing trade agreements, collection, etc. Noga Ice Cream will not distribute the ice cream of manufacturers other than General Mills in the super premium category. The antitrust exemption granted for the agreement between General Mills Israel and Noga Ice Cream is for six years.
The agreement required approval from the Antitrust Authority because the ice cream made by Osem-Nestle competes with Haagen Dazs in the super premium category. The Antitrust Authority decided to approve the agreement because the market share added by General Mills to Osem-Nestle is insignificant, amounting to only a few percent.
The other important players in the sector of ice cream for home use in the premium and super-premium niches are Strauss Ice Cream, owned by Unilever, and Ben & Jerry's, which operates in the local market through US company American Quality Products, owned by global company Unilever. The US company operates in Israel independently of Unilever's Strauss Ice Cream.
The Antitrust Authority said that the aggregate market share of Osem-Nestle Ice Cream and Haagen Dazs did not exceed the market share of each one of its competitors. The Antitrust Authority noted in its decision, "Even if a competitor is removed from the market as a result of the arrangement, this competitor's business is not enough to have a significant effect on competition in the market."
In effect, the Antitrust Authority believes that the arrangement is an efficient one for General Mills because it now holds a limited distribution system in comparison with its competitors. The Antitrust Authority's economists believe that the new company will lead to a substantial increase in the number of points reached by Haagen Dazs ice cream and a sharp drop in the marginal cost of distributing General Mills' products.
General Mills is a private company owned by General Mills International Business Two (60%) and Bodan Holdings (40%). It manufactures, imports, and markets various food products , including frozen baked goods and cake mixes under the Pillsbury brand, health bars under the Nature Valley brand, and ice cream under the Haagen Dazs brand.
Noga Ice Cream, a fully-owned subsidiary of the Osem-Nestle group, manufactures, markets, and distributes ice cream under the Nestle brand to the retail and institutional sector. Osem-Nestle markets ice cream in personal and family packages under a number of major brands, including La Cremeria, Extreme Giant Dulce de Leche, La Fruta, Joya, Gumigum, Crunch, and Cookilida.
Published by Globes [online], Israel business news - www.globes-online.com - on August 26, 2018
© Copyright of Globes Publisher Itonut (1983) Ltd. 2018