Israel Antitrust Authority director general Michal Halperin is ordering the major food suppliers to remove all their brand standsfrom the major supermarkets within two weeks, and from all other stores in Israel by August 7.
A document sent to the major suppliers made it clear that putting up and supplying sales stands branded by a major food supplier was a breach of the Food Law. The Antitrust Authority also stated that starting on these dates, the Antitrust Authority would consider enforcement measures against major suppliers and retailers for the stationing of branded displays. The order follows an investigation of a complaint against a major food supplier.
The Food Law bans large suppliers from intervening in the shelf space allotted to them in supermarkets, and from attempting to influence a supermarket with respect to the sales space allotted to it. The Food Law was intended to bar the large food suppliers from increasing their sales space, and to leave the decision about allocation of shelf space to the supermarket's judgment.
Recently, however, the large food suppliers have begun supplying supermarkets with sales points and stands clearly and prominently bearing the food supplier's brand. Halperin believes that these displays are a crude attempt by the food supplier to influence the supermarket, and to reach an understanding that the stands will be used to sell the supplier's food products exclusively. This is the reason why the major food suppliers are being forced to remove the branded stands immediately.
Every year, the Antitrust Authority publishes an up-to-date list of the suppliers with sales turnovers in excess of NIS 300 million, or which have been declared monopolies. As of now, there are 25 different entities on the list, including Tnuva Food Industries Ltd., Osem Investments Ltd. (controlled by Nestle SA (SWX:NESN)) (TASE: OSEM), the Central Bottling Company (Coca Cola Israel), Strauss Group Ltd. (TASE:STRS), Unilever, Neto ME Holdings Ltd. (TASE;NTO), and Diplomat.
The Food Law bans the major suppliers from committing various acts, including intervening in the location on the shelf, intervention or making recommendationsconcerning the final consumer price, andintervening in the reservation or allocation of shelf space.
Published by Globes [online], Israel business news - www.globes-online.com - on July 10, 2016
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