Text size

Many suppliers yesterday stopped sending goods to grocery retailer Clubmarket, as the chain collapsed. Foodstuffs giants Elite and Osem, Neto, local Procter & Gamble distributor Diplomat, beverage-maker Tempo, cleaning supply company Sano and paper goods manufacturer Hogla-Kimberly all cut Clubmarket off. Dairy giant Tnuva, soft-drink supplier Jafora-Tabori and meat processing company Sogolowek were in less of a rush, stating matters are still being examined.

Some suppliers, such as Diplomat, turned their trucks around as early as Friday after Clubmarket didn't pay for goods already delivered. However, most believed that shareholders, the Borovich-Mozes-Rozen group wouldn't let the retailer collapse so they only reduced the number of special deals but kept sending goods almost as usual.

Suppliers who called the company couldn't get answers. In fact, they couldn't get senior executives even to answer the phone. Calls to outgoing CEO Yaakov Ginsburg got stuck at the secretaries, who simply didn't transfer the callers.

The collapse came just as retailers are paying off suppliers for Passover holiday sales - traditionally a peak time in the foodstuffs sector - with suppliers left waiting to be reimbursed for record volumes of goods.

Sector sources estimate that major players - Strauss-Elite, Osem, Tnuva, Central Bottling (Coca Cola) and others - have lost tens of millions of shekels. However, the blow is hardest on small and medium-sized players, many of whom could face collapse as a result of the unpaid debt from the major grocery chain.

Suppliers are livid, as the business sector had believed that the owners of national air carrier El AL would not let the retail chain go bankrupt. The market yesterday called the situation "the loss of shame."

Senior business leaders began collecting signatures on a petition calling for a boycott of El Al. They plan to publish newspaper ads later this week declaring they don't plan to fly El Al and calling on the citizenry to follow suit, until its owners, who are considered flush, pay their debts.

Many senior business leaders have already signed the petition and there is a great deal of anger toward the Borovich-Mozes-Rozen group, with allegations that its shareholders opted not to invest in Clubmarket out of pocket, letting it collapse and drag with it the foodstuffs sector and Israel's entire retail sector. One CEO said yesterday that the group led the entire Israeli market into collapse.

Some of the anger stems from the fact that after the chain got behind in its payments, its owners refused to give suppliers and landlords guarantees against the goods they delivered.