Israel's Biggest Dairy, Tnuva, Fined $7 Million After Admitting to Price Fixing

Deal allows the food manufacturing giant to avoid conviction in six-year investigation by Israel’s antitrust agency

Tnuva cottage cheese on display in a minimarket fridge.
Tnuva cottage cheese on display in a minimarket fridge. Tali Mayer

The six-year investigation of Tnuva on allegations of harming competition ended with a compromise and a fine of 25 million shekels ($7.16 million), which the Israeli food manufacturing giant will refund to consumers. The company thus avoids a criminal conviction in the case, one of the largest probes conducted by the Israel Antitrust Authority in recent years.

Arik Shor, who was Tnuva’s CEO in 2011, when the investigation began, and Erez Wolf, who was vice president of sales at the time and is now the CEO of Gad Dairies, will each pay a personal fine of 75,000 shekels under the settlement. In exchange for the fines and Tnuva’s admission of antitrust violations, the anti-monopoly agency agreed to end the investigation.

A source close to the antitrust agency said Tnuva would refund 25 shekels directly to the credit-card account of anyone who purchased the company’s products from the country’s biggest grocery chains, Mega or Super-Sol, in September. Agency officials said around a million customers were eligible; this is how the 25 million shekel cost has been calculated.

“Apparently the big ‘Tnuva case’ wasn’t all that big at the end. The Antitrust Authority investigated for five years and ultimately it ended with a compromise and not a conviction,” said a source close to Tnuva who requested anonymity.

The alleged violation involves a sale that Super-Sol ran before the Shavuot holiday. Tnuva suggested a “buy two, get one free” on some of the company’s dairy products. Antitrust investigators found emails between Tnuva’s sales directors saying they had convinced the supermarket chain that Israel’s other two main dairy producers, Tara and Strauss, would offer a similar sale.

Another case involving Tnuva dates from 2008, when the manufacturer and Mega set retail prices together. In that incident, the watchdog agency determined that Tnuva had violated antitrust law, since it is considered to have a monopoly over Israel’s dairy market. Israel’s largest food suppliers are prohibited from setting retail prices.