Israel Charges Supermarkets and CEOs with Price Fixing and Cartel Formation

Israel's Competition Authority has charged three supermarket chains and their CEOs with price fixing and creating cartels, following a three-year investigation. The chains, Victory Supermarket, Yochananof, and Super Bareket, have denied wrongdoing, citing legal advisors. The regulator alleges agreements to maintain profit levels, intervene in prices, and more. Shares in Victory and Yochananof fell up to 5.5% in response.

Israel's Competition Authority has taken a significant step in the country's retail sector by charging three major supermarket chains and their CEOs with price fixing and creating cartels [1]. The accused supermarkets are Victory Supermarket, Yochananof, and Super Bareket, while the CEOs in question are Eyal Ravid of Victory Supermarket and Eitan Yochananof and Ephraim Tshuva of Yochananof.

The investigation, which began three years ago, alleges that the supermarket executives entered into agreements to maintain profit levels, intervene in prices, and coordinate marketing strategies to avoid damaging each other's market share [1]. Both Victory and Yochananof have denied any wrongdoing, citing legal advisors.

The Competition Authority's suspicions against Ravid go beyond his involvement in cartel arrangements with Yochananof. He is also accused of fixing prices through suppliers rather than directly [1]. The Food Law prohibits retailers from interfering with the prices charged by other retailers, and the Competition Authority suspects that Ravid coordinated with suppliers of other chains to ensure that prices did not rise [1].

The alleged price-fixing activities have led to a decline in shares for both Victory and Yochananof, with their stocks falling up to 5.5% in response to the news [1]. This is the first time the Competition Authority is carrying out criminal enforcement under the Food Law.

The Israeli Competition Authority's announcement marks a significant development in the country's retail sector and highlights the importance of fair competition. As the investigation unfolds, it will be crucial to monitor the progress and potential implications for the industry.

References:
[1] Eitan Yochananof and Eyal Ravid credit: Eyal Izhar and Tali Bogdanovsky. (2023, February 13). Supermarket CEOs summoned to criminal hearing on price fixing. Globes. Retrieved from https://en.globes.co.il/en/article-supermarket-ceos-summoned-to-criminal-hearing-on-price-fixing-1001481959