Major Israeli food businesses Shufersal and Strauss under investigation for price fixing

November 10, 2021 by Gil Tanenbaum - TPS
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Two of Israel’s largest companies, The Shufersal supermarket chain and the Strauss food production company known largely for its dairy products, are currently under investigation for price-fixing schemes.

Israeli shekel bills. Credit: Nati Shohat/Flash90.

Officials from Israel’s Competition Authority raided the offices of the two companies in Tel Aviv on Tuesday, confiscated numerous documents, and interviewed executives.

Much has been reported in the Israeli media lately on the increase in prices that Israeli consumers face. Much of this was attributed to the current worldwide supply chain problems caused by the Covid crisis. This has been cited as a cause of inflation in many nations. But with the US Dollar plummeting in value against the Shekel, as well as the Euro, Israelis expected prices to drop.

Israel’s Competition Authority said that Tuesday’s raids came in response to complaints made by retailers and suppliers about increasing prices. The complainants feel that the price hikes were unwarranted.

The Competition Authority said in a statement that it has opened an investigation and is examining the suspicion of breach of the Competition Law by a number of suppliers and retail chains following recent events.

Passed in 2014, the Food Law of Israel regulates how suppliers and retailers in the food market can do business with one another and set prices. It also has explicit limitations on the behaviours of such companies, which is what Shufersal and Strauss are suspected of having violated.

The Authority has said that it intends to investigate other chains too.

The raids took place just a week after it was revealed that the Shufersal company offered special discounted prices to Israel’s ultra-orthodox community. This was not done in the open, through lower prices at branches in areas with high ultra-orthodox populations. Rather, the discounts were given behind the scenes through special websites.

The revelation of the special discounts met with a hostile response on the part of the public.

Strauss released a statement to the Tel Aviv Stock Exchange, where it is publicly traded, saying, “The company wishes to give notice that this morning, 9 November 2021, that representatives of the Competition Authority carried out a search and collected materials at the company’s offices in connection with suspicion of offences under the Economic Competition Law, and that company employees were questioned, among them senior company officers.”

Shufersal issued a similar statement to the Tel Aviv Stock Exchange in which it acknowledged that the company’s offices were also searched and that senior officials were questioned. “In the search warrant presented to the company it was stated that the search is in connection with suspicion of a cartel,” said the statement. “At the time of this notification, the company has no additional information about the substance of the investigation and its circumstances.”

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