Israel Competition Authority head Adv. Michal Cohen announced today that Wissotzky Tea has been declared a monopoly. Wissotzky has been targeted by the antitrust regulator for several years and the examination that has led to the latest exceptional announcement began some 18 months ago. The announcement that the tea company is a monopoly has come after a hearing over the past few months. Wissotzky has been declared a monopoly in the green tea and herbal team markets.
The Competition Authority found that Wissotzky's share in sales of green tea and herbal tea to retailers in Israel is higher than 70%. The regulator also decided to declare Wissotsky a monopoly due to its major market power that allows it to charge higher prices than competing suppliers for green and herbal tea, which has allowed the company to maintain persistent dominance for many years. Due to its market power, the company's rivals have found it difficult to increase their sales even in cases where they offered lower prices than those offered by Wissotzky, even in situations where new brands have entered Israel that were successful abroad.
The announcement means that Wissotzky will be defined as a "large supplier" and will now be subject to all the restrictions imposed on large suppliers. These include a prohibition on intervening in the arrangement of the shelves in the marketing chains, a prohibition to condition the sale of a certain product on the purchase of another product, and a general prohibition on any type of intervention in the price of the product to the final customer in the chains and other restrictions that appear in the Food Law.
Prior to the hearing, the Israel Competition Authority had also considered declaring Wissotzky a monopoly in the black tea and flavored black tea markets. However, the data collected following the hearing strengthened the conclusion that Wissotzky's share of black tea is less than 50% and is on the verge of erosion, as well as the fact that Wissotzky has a rival who also has significant market share in this market.
61 Israeli companies are monopolies
61 companies are currently defined as monopolies in Israel with most of them declared in the 80s and 90s.Over the last decade, only three companies have been declared monopolies, all them not in the food sector: Ashdod Mort, Delek Drilling (NewMed Energy) and Environmental Quality Services. Today, Wissotzky joins the list, which already includes the Central Bottling Co. (Coca Cola), Strauss (milk delicacies) and Elite chocolate bars, instant coffee and cocoa powder, Tnuva in the field of milk and dairy products, Osem for pasta, Tivol and Israeli Food Products Ltd. for margarine and mayonnaise. All were declared monopolies in 1988 and 1989.
Minister of Economy and Industry Nir Barkat said, "I am happy to see that the Competition Authority is waking up from a long sleep and after 20 years has declared a monopoly in Israel. The Competition Authority's role is to protect the public from monopolies and to use all legal tools for the sake of competition. My policy as Minister of Economy is to fight monopolies and those who exploit the public. My expectations from the Competition Authority, which is under the Ministry of Economy is to act resolutely against anyone who prevents competition, acts as a monopoly and oppresses the public. I expect many more steps in this direction."
Published by Globes, Israel business news - en.globes.co.il - on June 26, 2023.
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