The Antitrust Commission is investigating allegations that the Central Bottling Company (Coca-Cola Israel) exploited its dominance in the beverage market by forcing require retailers who bought its drinks to also buy products from its Tara Dairy division.
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The local bottler of Coca-Cola products, which is controlled by Muzi Wertheim, recently spent around 1 billion shekels ($284 million) to boost Tara’s market share.
The Central Bottling Company told TheMarker that it was not aware of any antitrust investigation being conducted against it but welcomed any inquiries from the Antitrust Commission, adding that the company maintains regular contact with the agency.
“The company is meticulous about compliance with all the provisions of the antitrust law,” the company said, “and is unaware of any flaw in its conduct.”
While some major food retailers whose representatives were interviewed for this report said they had never seen Central Bottling Co. engage in aggressive tactics, others said they were not surprised by the probe and claimed that Coca-Cola Israel has used such tactics for years.
One senior grocery executive told The Marker that Coca-Cola Israel had “shamelessly exploited its monopoly and through its dominance of the cola market had imposed conditions to promote Tara products, [including] specific cheese products.”
The executive noted that Tara faces stiff competition from Israel’s biggest dairies, Tnuva and Strauss, and said that his supermarket chain would give Tara less shelf space if Coca-Cola was out of the equation.
Last week the Co-op Shop supermarket chain submitted to Central Bottling Co. a legal opinion from the firm of David Tadmor, a former antitrust commissioner, according to which the conditions the company imposes on small groceries on moshavim, small cooperative farming communities, violated antitrust provisions. As antitrust commissioner, Tadmor imposed restrictions on Coca-Coca Israel after it was declared a monopoly in 1998.
In the past six months, about 100 moshav grocery stores have affiliated with Co-op Shop. According to the legal opinion, Central Bottling Co. refused to extend to these stores the same discounts it gave to other Co-op Shops, saying that it does not provide such discounts to moshav groceries. Central Bottling Co. also allegedly threatened to pull Coca-Cola products from the groceries’ shelves if they cooperated with Co-op Shop. Co-op Shop declined to comment.