"Tnuva sale could perpetuate its monopoly"

Sources: Tackling the monopoly could mean confrontation with Chinese government.

The sale of Tnuva Food Industries Ltd. to Chinese government company Bright Food Group Ltd., which is due to be signed within days, is liable to seal the fate of efforts to make structural changes at the company's monopoly in the dairy market, which could also affect efforts to make structural changes in the food industry monopoly in Israel, say food industry sources.

"This is the last chance to clearly and publicly the government's intentions to carry out structural changes in the food monopoly, especially at Tnuva, in terms of caveat emptor," said a source. "The main problem is that this is not just the sale to a foreign corporation, but the sale of an Israeli company, which politicians classify as strategic, to a Chinese government company.

"If someone imagines that, in the future, it will be possible to carry out structural changes through legislation, such as breaking up Tnuva, he will not face a company that is bound by Israeli law, but the government of a great power, whose political ties with it are a critical factor. This means confrontation with the Chinese government. If the sale goes ahead, it will probably be impossible to deal with Tnuva as a monopoly, which will damage the possibility of dealing with other food monopolies."

Another top food industry sources said, "If the sale of Tnuva to Apax Partners was another public sentiment about Tnuva, until the scale of the trick they pulled became apparent, that sentiment should certainly now disappear. The Chinese don’t need Tnuva to produce cottage cheese in China, because improving Chinese food products can be achieved by acquiring technologies. They need Tnuva as a springboard to other markets, especially in Europe.

"Tnuva is a small part of a huge global acquisitions campaign by the Chinese, which is currently focused on Africa, where they have taken over natural resources. We should learn from the Americans, who blocked Chinese efforts to acquire ports in the US."

Published by Globes [online], Israel business news - www.globes-online.com - on May 11, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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