Tnuva hit with Israel’s largest-ever antitrust fine for price fixing

Dairy giant to pay NIS 25 million over efforts to raise prices and undercut competition at a pair of supermarket chains

A Tnuva plant near Jerusalem on May 1, 2015. (Miriam Alster/Flash90)
A Tnuva plant near Jerusalem on May 1, 2015. (Miriam Alster/Flash90)

Dairy giant Tnuva was hit with a NIS 25 million ($6.9 million) fine after it admitted to illegal price fixing, the largest-ever financial penalty on a firm in Israel for violating antitrust laws.

Under an agreement last month with the Antitrust Authority that was approved by an antitrust tribunal, details of which were cleared for publication on Monday, two former senior executives at the company were also fined NIS 75,000 ($20,000) apiece.

The NIS 25 million fine was imposed on Tnuva over agreements it reached with the Shufersal and Mega supermarket chains to raise prices on a number of its products, as well as an understanding with the stores in 2011 to set a uniform pirce 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.

The authority said the money would go directly to consumers who shopped at Shufersal and Mega in September 2017 in the form of an automatic reimbursement to their credit cards.

Demonstrators take part in protest against the Tnuva dairy company over its prices at supermarket in Modiin on September, 13 2011. (Jorge Novominsky/Flash90)

The announcement of the fine comes nearly a year after reports indicated a settlement had been reached between the Antitrust Authority and Tnuva over the company’s anti-competitive practices.

The company, founded over 80 years ago as a cooperative owned by kibbutz dairy farmers and long seen as an Israeli icon, is currently owned by China’s Bright Food Group, which bought a controlling stake in 2014 at an NIS 8.6 billion valuation. At the time of the alleged price fixing, it was owned by London-based Apax.

In 2003, Tnuva was cited by the Antitrust Authority for price fixing in the poultry market by forcing slaughterhouses to set quotas. The decision was seen as a major factor in opening up the poultry market in Israel.

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