Competition Authority warns Strauss of pending indictments

The Competitors Authority has notified meals firm Strauss Group (TASE: STRS), its former CEO Giora Bardea, and its chief monetary officer Ariel Chetrit, of its intention of submitting indictments towards them, topic to a listening to.

In response to the discover, Strauss signaled to its opponents by its quarterly financials, in a press launch, and in different messages, that it was contemplating elevating costs “as a trial balloon with the purpose of signaling to the most important meals suppliers, notably its opponents, of its want to achieve an association on a value hike.” The corporate and its officers are due to this fact suspected of making an attempt to kind a cartel.

In its monetary statements for the primary quarter of 2021, launched in Could that yr, Strauss acknowledged that, within the mild of rises within the costs of some uncooked supplies and of transport, it was ready for varied eventualities, and that in some circumstances it will study revising its promoting costs.

Similtaneously the quarterly report was revealed, Strauss additionally revealed a press launch by which it acknowledged that it was monitoring the results of the rise in enter costs, and was analyzing plans and programs of motion, together with pricing coverage. This was accompanied by different public messages by which Strauss stated that it was analyzing in depth the potential of value rises, and had not but reached a choice.

In response to the Competitors Authority, these public messages have been broadcast even though no substantial dialogue had taken place on the firm on elevating costs, and even though, so far as Strauss was involved, this was an unimportant consideration when it comes to its impact of Strauss in Israel, compared with different enterprise plans.

The assertion of the allegations additionally claims that Strauss acted in the way in which that it did regardless of the worry that arose on the firm that it will pay a value for these statements in damaging media protection, hurt to the corporate’s status, and a decline in shoppers’ demand for its merchandise, particularly because it was the primary meals firm to specific itself on the topic. Strauss even estimated that elevating costs would result in a damaging public response and would hurt its public picture and its competitiveness.

The assertion of allegations makes reference to the truth that the availability, advertising, and distribution of meals in Israel are characterised by a excessive diploma of focus, and {that a} small variety of suppliers with giant market shares controls a lot of the market, and to Strauss’s standing as one of many greatest meals suppliers in Israel and as a monopoly in sure elements of the meals market.

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The affair broke in November 2021, when Competitors Authority investigators raided the places of work of grocery store chain Shufersal and questioned senior managers, amongst them then CEO Itzhak Abercohen, and likewise questioned then Strauss CEO Bardea. Within the following days, Rami Levy, proprietor of Rami Levi Chain Shops, and the CEOs of grocery store chains Victory, Yochananof, and Osher Advert, have been additionally questioned. On the meals suppliers facet, senior managers of Diplomat, Williger, and Unilever have been questioned. The investigation of the suppliers continued till a number of months in the past, and Bardea was questioned once more in Could this yr.

No resolution has but been made about attainable fees towards different firms investigated within the affair, and a few are nonetheless being investigated.

The suspicion below investigation is that there was a cartel involving competing suppliers and retailers. On the coronary heart of the investigation are statements within the press and media, on Fb, and in monetary experiences. The investigation focuses on interviews given by senior managers within the meals trade to the media in a means that would symbolize the passing of messages in an effort to coordinate positions on elevating costs.

A press release on behalf of Strauss Group says, “Our place is that the corporate’s conduct was flawless, and that the corporate officers behaved as anticipated of them, and on authorized recommendation. We’re certain that, after the corporate and its officers current their place, an knowledgeable resolution shall be made on closing the case.”

Presumption of innocence: The suspects within the affair haven’t been convicted of committing any crime, and they’re entitled to the presumption of innocence.

Revealed by Globes, Israel enterprise information – en.globes.co.il – on August 21, 2023.

© Copyright of Globes Writer Itonut (1983) Ltd., 2023.