Mitzpeh Super-Sol Charges More, in Possible Antitrust Violation

Residents of Mitzpeh Ramon pay 28% more at their local supermarket than residents of Jerusalem, TheMarker finds.

Residents of Mitzpeh Ramon pay 28% more at their local Super-Sol than residents of Jerusalem, a city with more supermarkets and more competition, TheMarker found through a series of price checks.

As a result, the supermarket chain may find itself in trouble with antitrust authorities.

Over the past several weeks, TheMarker ran a series of price comparisons that revealed that branches of supermarkets in areas with less competition charged more than branches in areas with more competition, regardless of local salary levels.

Mitzpeh Ramon has only one supermarket - a branch of My Super-Sol, the chain's most expensive format. The average salary in the town is a low NIS 5,146 per month, according to the Czamanski Ben Shahar consulting company, and rents there are considerably lower than in Jerusalem.

However, the residents have few options other than the local Super-Sol - they can shop at the local convenience stores, or they can drive an hour to Be'er Sheva.

Residents of Yeruham and Shlomi face the same problem, noted Czamanski - they, too each have one supermarket, a My Super-Sol.

An antitrust expert said Super-Sol could be considered a local monopoly if it is the only option within a 20-minute drive, or if it controls more than 50% of the local market.

TheMarker's price comparison was conducted versus a Super-Sol Deal in Jerusalem, which is one of Super-Sol's less expensive formats.

"If a store is a local monopoly, it cannot charge excessive prices. One way of calculating whether prices are too high is by comparing them with prices in an area with competition, such as the outlet you checked in Jerusalem," the expert said.

If Super-Sol is indeed a local monopoly and is taking advantage of this, then Mitzpeh Ramon residents may be eligible for compensation, he said.

TheMarker found that residents of Mitzpeh Ramon pay NIS 8.99 for a kilo of bananas, compared to NIS 3.99 in Jerusalem. Since the Agriculture Ministry's recommended price is NIS 4.25 per kilo, this means the markup in Mitzpeh Ramon is more than 100%.

Sweet potatoes cost Mitzpeh Ramon residents NIS 8.99, against NIS 5.80 in Jerusalem; lemons cost NIS 10.99 (versus NIS 6.60 ).

A box of Cariyot cereal costs NIS 29.99 in Mitzpeh and NIS 26.99 in Jerusalem; a 400-gram package of Soglowek Gold hamburgers costs NIS 23.99 versus NIS 21.99; and a bottle of Hermon red wine costs NIS 38.99 instead of NIS 24.99.

Super-Sol said in response that it runs the same sales at both stores. It criticized TheMarker's findings, saying, "The Mitzpeh Ramon branch of My Super-Sol has the format's lowest prices. Therefore, we regret this tendentious article whose intentions we do not understand. The prices of all the most-sold products were not checked," it said, stating that tomatoes and cucumbers are sold for NIS 0.99 throughout the periphery, for instance.

Previous price comparisons by TheMarker sparked boycott movements around the country, and in response Super-Sol agreed to lower prices at its stores in the south.

Last week, Super-Sol chairman Effi Rosenhaus committed to lowering prices in Kiryat Shmona after local residents launched a protest in response to price comparisons by TheMarker; residents of Nes Tziona are planning to protest their local Super-Sol for similar reasons.

The Antitrust Authority refused to state whether it would take any regulatory action against Super-Sol, but it noted that the Antitrust Law forbids a monopoly from taking advantage of its status in order to charge unfair prices.