‘Bakery cartel’ indicted for fixing bread prices

Managers from several large bakery chains were indicted Wednesday for coordinating their prices and preventing competition in the bread market.

The Israel Antitrust Authority presented a charge sheet against the bakeries, among them nationwide chains such as Angel, Berman, Ahdut, Dganit Ein Bar, and others, to the Jerusalem District Court.

The indictment accused the bakeries’ managers and other top executives of collaborating to prevent competition by dividing the customer base equally among them. With the threat of competition removed, the firms agreed to work toward raising the regulated price of plain white bread and halla.

An Israeli chooses bread at a local store (photo credit: Noam Moskowitz/Flash90)

Smaller bakeries Davidovich, Alumot, Oranim and Merhavit were also indicted.

The decision to join forces against consumers was made in a series of joint meetings held in various locations around the country. The Israel Antitrust Authority began to investigate the bakeries in mid-2010 by conducting raids on them and arresting executives suspected of involvement in the cartel.

Following the indictment, activists called on Industry and Trade Minister Shalom Simhon to cancel a recent price raise on government-regulated white bread.

“The fact that bread can be sold cheaply, combined with the decision to indict three big bakeries, shows that the bakeries’ price was exaggerated and based on a distorted prediction of rising wheat costs worldwide,” the “Israel is Dear to Us” protest movement said in a statement.

“Abroad, healthy bread made of whole wheat can be bought for a price that is cheaper than the price of plain white bread in Israel,” the statement  read.