Rivals Accuse Super-Sol of Violating Antitrust Regulations

Monster chain is selling below cost when outlets are near rivals' stores, they claim

Private supermarket chains have approached the Israel Antitrust Authority complaining that Super-Sol is using an anti-competitive pricing policy to drive them out of business, TheMarker has learned.

Among the restrictions that Super-Sol accepted in order to receive approval to buy the bankrupt chain Clubmarket - is eschewing anti-competitive behavior toward suppliers and rival retailers.

But rival chains claim that Super-Sol has lowered its prices below cost in regions where its branches are located in proximity to those of the independents.

The agreement with the antitrust commissioner concerning the sale specifically outlawed this practice.

One example of this pricing policy is in the northern Netanya area near the Hadarim Mall. Haaretz has acquired figures showing that Super-Sol is selling products for less than what they paid for them, via reduction of prices to levels below those of its competitor time after time.

Super-Sol has also been accused of the same practice in Or Akiva.

Industry sources say that the problem is not Super-Sol?s behavior, but the restrictions that were imposed on it. According to one senior source: ?It is impossible to expect Super-Sol not to lower prices when their competitors do.?

Fighting suppliers, too

The newly beefed-up Super-Sol is certainly not shying away from confrontation with its suppliers. The supermarket chain, which swallowed rival Clubmarket for NIS 1 billion, is yanking a whole range of Unilever products from branch shelves as a negotiating tactic, to wrest better terms of trade from the manufacturer.

Sources associated with Super-Sol say the chain does not mean to get into the kind of brawl it had with Strauss two years ago. But neither does its management seem willing to bend on demands for sweeter terms from suppliers ? even at the cost of reducing the selection on the shelves.

The rating company ACNielsen says Supersol?s market share has reached 40.5 percent after the purchase of Clubmarket. Blue Square Israel is No. 2 with a 24.1 percent market share.

Super-Sol has also remained stoic with respect to the idea of not selling Nutella spreads and Ferrero Rocher chocolates as it battles over terms with supplier Leiman-Schlussel.

As for Unilever, its big brands include Bagel & Bagel pretzels, Klik chocolates and Telma mayonnaise.

Insofar as is known, Super-Sol does not plan to withdraw Telma breakfast cereals and BlueBand margarine at this point. Market sources say Super-Sol is careful not to ban favorites among customers who might rebel at the thought of losing Telma cereals or Kinder ?surprise eggs? for the kiddies. ?They still want to make money,? said one source.

Some informed sources say the chain is in talks with suppliers over long-term contracts, and add that the talks are being conducted ?professionally.? But other sources in the market say Super-Sol is demanding terms that would not allow suppliers to breathe.