Tnuva to pay NIS 25m. penalty for antitrust offenses

The management of Israeli food company Tnuva is expected to sign a consensual order embodying the compromise the company reached with the Antitrust Authority under which it will pay a NIS 25 million penalty. Tnuva admits committing violations of competition law, including pricing offenses and an approach to a retail chain concerning the retail price of a competitor’s products.

The fine is the highest ever imposed by the Antitrust Authority on an individual offender against restrictive trade practices.

The offenses took place in the period 2008-11 when Tnuva was owned by Apax Partners. Apax Partners Israel is headed by Zehavit Cohen. Apax Partners sold Tnuva to Chinese company Bright Food in 2014.

Under the settlement with the Antitrust Authority, the fine will be paid to customers through their credit cards. In addition, two former company officers will accept personal responsibility and will pay fines of NIS 75,000 each to the state. The two are former CEO Arik Shor and former sales division manager Erez Wolf.

Tnuva will admit to dictating consumer prices after it agreed upon the retail price of its products with a retail chain. The order contains an admission by Tnuva to two such instances, once with Shufersal Ltd. and once with the Mega chain. Such practices suppress price competition between retailers.

In addition, Tnuva admits that in 2011, in advance of Shavuot (when dairy products are consumed in large quantities), it approached Shufersal and Mega and asked them to price uniformly 250gram packages of soft cheese from all suppliers: Tnuva, Strauss and Tara. Both Shufersal and Mega acceded to the request.

Once signed, the order will be released for public comment and will then be brought before the Antitrust Tribunal for approval.