Super-Sol Shareholders Give Green Light to Acquisition of Organic Market

The biggest food retailer in Israel will pay NIS 31 million for Organic Market if the Antitrust Authority agrees to the deal.

A Super-Sol shareholder meeting voted yesterday in favor of acquiring organic-products chain Organic Market.

Super-Sol, already the biggest food retailer in Israel, is paying NIS 31 million for Organic Market - if the Antitrust Authority smiles on the deal.

organic - Haaretz - April 6 2011

Eighty-one percent of Organic Market is held by Yoav Lev and his life partner Holly Bronfman, sister of Matthew Bronfman, who owns a controlling stake in Discount Bank - and in Super-Sol itself. Organic Market CEO Elad Lahav and private investors own the other 13%.

Under the deal, the eight Organic Market branches will continue to operate as is, and three more branches will be established. Super-Sol will continue to pursue its organic ambitions, but through Organic Market, as the overall group expands.

The parties also agreed that Organic Market's managers will stay in place for five years.

Super-Sol already has organic-products areas (branded "Green" ) at six branches. Those too will continue to operate as is - and there too, Super-Sol is ambitious, intending to open 20 more Green store areas by the end of the year. Altogether, Super-Sol aspires to have some 50 Green areas in its stores in two to three years.

Lahav said Organic Market's management supports the deal. He said that with Super-Sol the company could offer a wider variety of people quality organic products at low prices.

The Israeli market for organic food and other products is believed to be at between NIS 300 million and NIS 400 million a year. In other words, it's still small, about 1% of the Israeli market for consumer products. But it's growing like a weed, by 20% to 30% a year, while the rest of the consumer-products market is growing at only a few percent a year.

The first of the big chains to realize the potential wasn't Super-Sol, it was archrival Blue Square. It acquired 51% of Eden Teva Market in 2007. In recent months, Blue Square has opened Eden Teva Market areas in Mega supermarkets, in the format of a store inside a store.

Rami Levi, owner of the discount supermarket chain of the same name, is also considering an entrance into organics by opening organic-products aisles in his stores - or as stand-alone stores.

Super-Sol has been in the news for the case proceeding in court against the chain, its CEO Efi Rosenhaus and its marketing manager, Eli Gidor, for alleged anti-competitive behavior after rival chain Blue Square advertised special sale terms, that were cheaper than special terms Super-Sol advertised the very same day. The chain's chiefs deny the allegations, which include trying to bully suppliers into causing Blue Square to cease its sale.