The Zoglobek processed meat company has signed exclusive marketing agreements with several small supermarket chains that effectively prevent competition by barring the sale of competitors' products in these chains, sources in the food industry say.
A Haaretz investigation found that several chains, including Hetzi Hinam ("Half Free") and Super Abba Victory, indeed sell only Zoglobek's frozen hot dogs. Both Zoglobek and the chains denied that this is due to an exclusivity pact.
But several other meat companies claimed that they tried to sell their products in these chains, and were even willing to pay for shelf space and refrigeration, but the chains refused. One company said that one chain told it explicitly that "Zoglobek pays much more for exclusivity."
Antitrust Commissioner Dror Strum, who is currently completing a wide-ranging examination of the various supermarket chains, told Haaretz: "Exclusivity agreements constitute restraint of trade, unless they were approved by the commissioner. If they did not obtain [permission], this is illegal."
However, he added, it is not a crime for a chain to sell the products of only one supplier, as long as that supplier competed for shelf space against other suppliers on equal terms.
Zoglobek denied that any of its marketing agreements require exclusivity. If a particular chain carries only Zoglobek products, that is the chain's own decision, the company said.
Eyal Ravid, owner and CEO of Super Abba Victory, gave a similar answer. He acknowledged that his chain sells only Zoglobek hot dogs, but explained: "They are the ones I like best, because this is the best-selling brand on the market."
Hetzi Hinam officials could not be reached for comment.
According to Business Data Israel, the retail food market in Israel totaled about NIS 31.85 billion this year. Small, privately owned chains such as Hetzi Hinam and Super Abba, which are generally cheaper than the major supermarket chains (Supersol, Blue Square and Clubmarket), account for a little over 10 percent of this market - some NIS 3.3-3.5 billion a year, according to BDI. However, the private chains have been steadily increasing their market share over the past two years.
According to studies done by two other companies, ACNeilsen and Storenext, Zoglobek's market share is higher in the private market - which consists of open-air markets and small grocery stores as well as the privately-owned chains - than in the major supermarket chains. Yet even in the major chains, which ACNeilsen monitors, Zoglobek is the largest single seller of frozen hot dogs, with a 36.7 percent market share. The Storenext data, which is based on a survey of 500 supermarkets and minimarkets (and therefore includes many stores from the private market), puts Zoglobek's market share at 40.9 percent.
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