Another storm has hit Israel’s retail market. At the request of “Globes”, the Ramle Magistrates Court today lifted a gag order that the Israel Police have arrested three men on suspicion of trying to blackmail Blue Square Israel Ltd. (NYSE: BSI; TASE: BSI) for NIS 25 million. Blue Square, Israel’s second largest supermarket chain, is a subsidiary of Alon Israel Oil Company Ltd.
The three men allegedly told Blue Square that they would file a class-action lawsuit against the company in this amount and even release a video they had taken at the Mega supermarket in Ra’anana, which they claimed that the supermarket was not destroying meat whose sell-by date had expired.
The court kept the gag order on the suspects names, and on the allegations of blackmail and conspiracy. A source involved in the case said that the prosecutors were leaning toward indicting the suspects.
The case goes beyond extortion. The Ministry of Health is examining whether there is any truth to the suspects’ claims. One of the suspect’s lawyers told the court that the material in the confidential investigation included an e-mail from a Blue Square executive that implied that the company knew that supermarkets were not destroying unsafe meat.
Published by Globes [online], Israel business news - www.globes.co.il - on August 2, 2007
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