The Competition Authority filed an indictment today (Wednesday) against the Victory, Yochananoff and Super Barkat chains and their managers - after they coordinated prices.
Victory CEO Eyal Ravid is charged with seven counts, Yochananoff Deputy CEO Elad Harazi and Super Barkat CEO Ephraim Tshuva with two counts, and Yochananoff CEO Eitan Yochananoff with one count.
The indictment was filed after hearing the defendants' arguments.
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The indictment is the product of a complex investigation conducted by the Investigations Department of the Competition Authority regarding suspected offenses of carrying out restrictive arrangements in violation of the Competition Law, inter alia, through public statements, and offenses of intervening in consumer prices charged by other retailers in violation of the provisions of the Food Law.
According to the first charge, Eyal Ravid, in a series of public statements, sought to convey a message to retailers and suppliers and open the door to price increases in the market.
Charges 2 and 3 deal with restrictive arrangements between Eyal Ravid and Victory and Yochananoff and Super Barkat. The arrangement between Victory and Yochananoff concerned an agreement that, under the market conditions prevailing at the time, the chains would not conduct promotions other than the pre-determined religious promotions. The arrangement between Victory and Super Barkat concerned an agreement between the parties to maintain the parties' gross profit after the increase in the purchase tax on disposable tableware.
Charges 4-6 deal with violations of the Food Law. The Food Law prohibits a retailer from intervening through a supplier in the prices charged by another retailer. According to the indictment, Eyal Ravid and Victory intervened with suppliers Dr. Fisher, Shestovich and Beit Hashita in the consumer prices of competing retailers.
In addition, the company managers were accused of violating supervisory duties to prevent offenses under the Competition Law and the Food Law.
Details of the charges in the indictment:
First charge - Attempt to make a restrictive arrangement with retailers and suppliers
According to the first charge, in a series of public statements, Ravid conveyed a message to suppliers and retailers about Victory's desire to raise prices - both from suppliers to retailers and from retailers to consumers, with the aim of reaching a binding arrangement to raise prices for consumers with suppliers and retailers.
On October 27, 2021, Ravid expressed himself in a Facebook post as follows: "...difficult days lie ahead of us, we could say that we are facing a real tsunami of price increases.".
Following this, Ravid expressed himself in media interviews: "The CEO of Shufersal also knows that if he counts the next 14 days carefully, he will receive on his desk five, between five and seven, the seven major suppliers, he will receive a new price list," he said in an interview for the savings program on Channel 12, on October 27, 2021. In addition, in October, he told Galei Tzahal: "There is going to be a very strong price increase.".
According to the indictment, Ravid repeated the main points in conversations with suppliers in which he indicated that his statements were intended to open the door to price increases.
Second charge - restrictive arrangement between Victory and Yochananoff
According to the indictment, at the end of October 2021, Ravid and Elad Harazi, Deputy CEO of Yochananoff, had a telephone conversation, in which they agreed that under the market conditions that prevailed at the time - a situation in which there was no change in the chains' market shares, they would refrain from holding additional promotions, apart from the periodic promotions determined in advance.
Third charge - restrictive arrangement between Victory and Super Barkat
The background to the third accusation is the purchase tax imposed on disposable utensils in order to reduce their use in November 2021.
According to the indictment, Tshuva and Ravid discussed and reached an arrangement whereby the two chains would maintain their gross profit rate on disposable products, compared to their gross profit rate in the period before the tax was imposed. According to the indictment, the two chains also acted in accordance with the arrangement.
Fourth charge - intervention in Dr. Fisher's prices at retailers
According to this indictment, Ravid interfered with the consumer price of Dr. Fisher's products at other retailers. At that time, Dr. Fisher sought to raise the price for retailers. Ravid agreed to accept the new price list and raised the consumer price, while agreeing with a Dr. Fisher representative that the company would ensure that the consumer prices of its products would also increase at other retailers.
Fifth charge - price intervention by S. Shestovich Ltd. at retailers
According to this indictment, between May and August 2021, Ravid intervened several times in the consumer prices of Shastovich products sold in the Rami Levy and Yochananoff chains. In this context, Ravid told a Shastovich representative that Rami Levy was 'spoiling' and "ruining" the market for Shastovich by selling at cheap prices. Ravid also stated that Shastovich should "disable" Rami Levy.
Sixth charge - intervention in the prices of Beit Hashita at retailers
According to this indictment, in October 2021, Ravid intervened in the consumer price of Beit Hashita products at other retailers. At that time, Beit Hashita sought to increase the prices of its products to retailers. Ravid responded to the price increase requests by saying, among other things:
""My dear brother, Uri. When Rami Levy raises the price, I will think about it, when Yochananoff raises the price, I will also think about it..." When a representative of Beit Hashita asked him to be patient regarding the increase in consumer prices at his competitors, Ravid wrote to him that if "the price is not higher, I will tell you bye.".
In another message, he wrote: I wish he would raise the price in 20%, "as long as the two terrorists raise," referring to the Rami Levy and Yochananoff networks.
Seventh charge – breach of duty of supervision
This charge accuses managers at Victory, Yochananoff and Sofer Barkat of failing to fulfill their supervisory duty to prevent violations of the Competition Law and the Food Law.
This is the first indictment filed in the food cases affair.
Additional indictments dealing with suspected attempted cartel arrangements were previously sent to Willifood and Strauss. Hearings regarding these allegations have taken place and the Competition Authority is now examining the allegations in order to decide whether to file indictments in their case as well.
Last December, the Competition Authority also summoned the VP of Sales at S. Shestovitz Ltd. for a hearing before filing an indictment for destroying evidence and obstructing legal proceedings.
