Cafe Chain Owner Quizzed in Price-fixing Probe

Antitrust Authority questions head of Ilan's House of Coffee as it investigates suspicions of price-fixing.

As part of an ongoing investigation into price-fixing and coordination of business practices among some of the country's café chains, the Antitrust Authority questioned the owner of Ilan's House of Coffee, Yaakov Luzon, last Thursday. The chain has 14 locations.

The investigation was launched following reports by TheMarker over alleged price-fixing by the country's café chains. Luzon confirmed that he was questioned by authorities. "I think the Antitrust Authority staff are doing their work conscientiously. I helped them to the extent that I could," Luzon told TheMarker.

The coffeehouse scene has been shaken up recently by the entry of a cut-rate player, Cofix, which has been selling coffee at NIS 5 a cup and opened its first location on Tel Aviv's Ibn Gabirol Street, near a branch of Ilan's, last September. Luzon became a 50% partner in Ilan's about six years ago and later bought out founder Ilan Shenhav's half-share.

Prior to the questioning of Luzon, staff from the Authority raided the offices of the Café Café chain, searched data on the company's computers and questioned its owner, Ronen Nimni. Also questioned were Kobi Hakak, CEO of the Roladin chain, and Ofer Koren, who owns the Café Landwer chain.

Cafe Cafe said in a statement, "The chain doesn't have and has not had anything to hide," adding that it continues to cooperate with "anyone who approaches or will approach" it.

"Prices have never been coordinated with other chains," Roladin said, "and the people at the company have answered all of the questions asked on the subject." Café Landwer also said it has cooperated with the investigation and denied ever coordinating prices with the competition.

TheMarker reported last month that the principals of major cafe chains and their top managers have discussed business among themselves on a regular basis and exchanged information. When Cofix came along at the end of September, they discussed market conditions and agreed not to lower prices or offer discounts to counter the new competition, according to TheMarker's report. “We [the coffee shop executives] are online, on the phone, I talk with them and we’re in touch with everyone,” Nimni had told TheMarker. "Ultimately we’re all friends, we’re all together. All the big chains, we’re all in touch and we’re all talking, and no one is going to reduce prices.”

Ofer Vaknin