Trustbuster: Chains cannot fix reductions from suppliers
Antitrust Commissioner Dror Strum has informed Supersol that it does not have the right to demand that prices by one supplier must be different from those of another supplier.
Antitrust Commissioner Dror Strum has informed Supersol that it does not have the right to demand that prices by one supplier must be different from those of another supplier. Strum made it clear to Supersol that the supermarket chains cannot stipulate in their annual agreements with suppliers that they must receive a certain reduction that is fixed according to the reductions given to other chains.
Supersol is demanding that the prices it pays Strauss always be 10 percent less than the prices paid by the private chains.
If the large chains put clauses like this into their contracts, this would "kill competition," experts in the antitrust field said. This does not mean there cannot be commercial negotiations, but it does mean Supersol cannot have a fixed reduction as compared with its competitors, they said.
The commissioner sent a letter outlining his position after Supersol demanded clarification about whether the Strauss-Elite group had received permission to stop selling its products to Supersol in areas where it is considered to have a monopoly. Strauss has a monopoly in the dairy deserts sector, in which it controls 73 percent of the market. The company's representatives had said in media interviews that they could stop supplying Supersol with such products. The commissioner's letter states that he was not asked to examine this question.
If Strauss were to stop supplying Supersol with such popular dairy deserts as Milky, this could hit Supersol's sales, as customers would likely go to a supermarket where these products are available.
Supersol refused to comment on its relations with suppliers.
Meanwhile, the Elite company announced yesterday that "Strauss is bearing in mind the possibility that in the short run, its business results could be affected somewhat," by the conflict with Supersol.
This was the first official statement to the bourse by Strauss-Elite, and it came apparently in the wake of a demand by the Israel Securities Authority.
Elite announced also that Supersol was demanding from Elite reductions that were even higher than those it was demanding from Strauss.
The battle over supermarket shelves reached a crisis last week, when Supersol removed some lines of Strauss products from its stores, in protest at the lack of progress in reaching an agreeable supply contract with the food manufacturer.
The merger between Strauss and Elite is due to be ratified or rejected by the Elite shareholders on Monday.