Carmit Candy Industries Ltd. (TASE: CMRT) and Strauss Group Ltd. (TASE:STRS) have agreed to end the legal dispute concerning the Cadbury affair, and to continue their business cooperation.
In line with this emerging goodwill, the companies have agreed to continue their cooperation in the coming years, based on their decades of cooperation in the past.
Carmit chairman Lenny Sackstein and Strauss president and CEO Gadi Lesin said, "We are glad to announce that the business and personal relationships between the parties for the past three years will continue in the future."
The companies agreed that Strauss would pay NIS 9 million to Carmit. In addition, Strauss undertook to continue buying Carmit products totaling NIS 50 million in the coming years. The compromise agreement was signed in a festive atmosphere, with the companies planning to continue their fruitful cooperation in the coming years.
The Cadbury-Elite affair begain in 2002, when English company Cadbury, one of the world's largest candy manufacturers, tried to enter the Israeli market through Carmit with chocolate products in competition with Strauss unit Elite. Cadbury was subjected to a series of aggressive actions by Elite, which allegedly thwarted its entry into the Israeli market.
The Antitrust Authority investigated the matter early in the 21st century, due to suspicions that Elite had prevented the import of Cadbury products to Israel, which were marketed through Carmit. At the end of the investigation, then-Antitrust Commissioner Ronit Kan issued a consensual order fining Strauss-Elite NIS 5 million, with the latter undertaking to refrain from similar actions in the future. The opinion of Dror Strum, Kan's predecessor as Commissioner, was issued before a hearing was conducted for Elite, following which it was decided not to indict the company.
The compromise ended a NIS 36 million civil suit filed by Carmit against Elite and its former executives, including CEO Giora Bar Dea, through Adv. Zohar Lande, Adv. Shai Sharvit, and Adv. Moran Bickel from the Barnea law firm. Carmit alleged that Elite had thwarted Cadbury's entry into the market in violation of antitrust law and misuse of its monopoly position.
Carmit presented evidence collected during the Antitrust Authority's investigation, including testimony by suppliers and wholesalers, who claimed that Elite had threatened that it would deprive them of discounts if they marketed Cadbury products. Carmit also showed Elite presentations indicating a clear strategy of blocking Cadbury's entry into the market. For its part, Elite submitted statements and documents in order to prove that Carmit's failure resulted from poor decisions that seriously affected its ability to sell products.
After some of the witnesses testified, the parties were referred to mediation, which eventually produced the compromise announced today to the court.
Published by Globes [online], Israel business news - www.globes-online.com - on September 7, 2014
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