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Shufersal boss denies price fixing; Rami Levy booted from Knesset committee

Competition Authority continues to investigate retail chains and importers, a day after their offices are raided over apparent breach of antitrust laws

Shufersal CEO Itzik Abercohen (L) and supermarket mogul Rami Levy (R) during a Knesset Economic Affairs Committee meeting, November 10, 2021. (Noam Moskowitz/Knesset spokesperson)
Shufersal CEO Itzik Abercohen (L) and supermarket mogul Rami Levy (R) during a Knesset Economic Affairs Committee meeting, November 10, 2021. (Noam Moskowitz/Knesset spokesperson)

The CEO of the country’s largest supermarket chain denied accusations of price-fixing during a Wednesday Knesset committee meeting, a day after he was taken in for questioning and his offices were raided by the Israel Competition Authority.

“Tell me, are you people normal? I’m answering your question — no,” Shufersal CEO Itzik Abercohen told members of the Economic Affairs Committee, after being asked if he coordinated prices with other retail chains.

The Competition Authority said it was looking at a number of suppliers and stores on suspicion that there may have been breaches of the laws governing competition. Top officials in the Victory supermarket chain, food producer Strauss Group and food importer Diplomat Holdings were also interrogated on Tuesday, according to Hebrew-language media reports.

Committee chairman MK Michael Biton (Blue and White) said he intends to deal with the alleged price-fixing issue in an “in-depth and methodical” manner, with the goal of reducing prices for the Israeli consumer.

Biton charged the Competition Authority with not acting fast enough.

“They have to wake up at once and handle this on a weekly basis,” he said.

Rami Levy, the owner of a discount supermarket chain that bears his name, was asked during Wednesday’s meeting by MKs Ram Shefa (Labor) and Ofir Sofer (Religious Zionism) to reveal his chain’s gross profit margin. The lawmakers also accused him of deceiving the public.

Levy responded by saying that he did not know who Shefa and Sofer were, resulting in Biton expelling him from the meeting.

“You will not speak disrespectfully toward MKs. And it doesn’t matter who you are or how much you are worth,” Biton said.

Levy was also interrogated at the Competition Authority’s offices on Wednesday, according to reports.

There were no further details given or companies officially named by the Competition Authority.

Senior officials at additional supermarkets and food producers are expected to be summoned for questioning in the coming days on suspicion of fixing prices via media interviews, press releases and financial reports, according to the Kan public broadcaster.

Blue and White MK Michael Biton, leads an Economic Affairs Committee meeting in the Knesset on November 10, 2021. (Noam Moskowitz/Knesset spokesperson)

The outlet did not give any further details on how this was allegedly done.

The Tel Aviv Stock Exchange briefly halted the trade of stock in both Shuferasl and Strauss on Tuesday. Trading in Victory was not stopped.

Shufersal said in a statement that the company was “acting in accordance with the law and will cooperate fully with the law enforcement authorities.”

Grocery prices in Israel are seen as a perennial concern for many in the country, where the cost of living is consistently rated as a top issue for voters, trumping even security matters.

The last decade has seen major protests sparked by accusations of price gouging on seemingly mundane products, such as cottage cheese and pudding cups.

Illustrative: People outside a Shufersal supermarket in Safed on April 6, 2020. (David Cohen/Flash90)

Shufersal and Abercohen were already under fire in recent days after a public outcry surrounding the supermarket’s website offering cheaper products to ultra-Orthodox consumers.

A Channel 12 news report last week found that goods offered on Shufersal Online, an online delivery grocery service run by the Shufersal grocery chain, were more expensive than the same products found on a second website it runs aimed at ultra-Orthodox consumers, which carries only products that have strict “mehadrin” kosher certification.

Abercohen suspended the discount website, which was aimed at customers with stringent kosher standards and large families, acknowledging the move was in lieu of extending the discounts to all Shufersal customers.

The grocery chain’s decision to suspend the discount website came after the television report sparked a stir among its customers and the head of Knesset’s Economic Affairs Committee Biton said he would order the CEOs of Shufersal and other chains to appear before the panel for a special discussion on grocery prices.

Illustrative: Israeli shoppers buy food from the frozen section of Rami Levy supermarket in Talpiot, Jerusalem. (Nati Shohat/Flash 90)

Tuesday’s raids are not the first time Shufersal has been named in connection with alleged price-fixing.

In 2018, dairy giant Tnuva was hit with a NIS 25 million ($6.9 million) fine after it admitted to illegal price-fixing with the Shufersal and Mega supermarket chains.

The fine was imposed on Tnuva over agreements it reached with the chains to raise prices on a number of its products, as well as an understanding with the stores in 2011 to set a uniform price on low-fat cream cheese made by the country’s three largest dairy producers in order to prevent the other two, Strauss and Tara, from undercutting Tnuva, the Antitrust Authority said in a statement. Two former senior executives at the company were also fined NIS 75,000 ($20,000) apiece.

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