Creaming Off Profits? Israel's Tnuva Dairy Sued in $142m Class Action Suit

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In the first class-action suit of its kind in the local food industry, the Tnuva dairy firm was sued in Jerusalem District Court on Thursday for about half a billion shekels ($142.9 million), over allegations that it took advantage of its monopoly position to overcharge the public on two of its dairy products.

A major focus of the lawsuit iss a claim that Tnuva improperly overcharged for its 5% white cheese – a popular thick spreadable dairy product that is a staple of the Israeli kitchen.

The lawsuit is seeking to have the court rule that the case can proceed on behalf of all purchasers of 5% white cheese in the seven years before price controls on the product were imposed last January.

Tnuva issued a statement in response saying it had not yet received the lawsuit and was therefore not in a position to comment.

The suit, which was filed by Yaron Zelekha – the former accountant general at the Finance Ministry who is now dean of the business management department at the Ono Academic College – did not seek damages for the more distant past because such a claim would be barred by the statute of limitations.

The suit does include an additional claim, however, that Tnuva overcharged for 38% sweet cream from June 2009 – when government price controls were lifted – until January 2014, when they were reimposed.

Due to its commanding position in the market for 5% white cheese and 38% sweet cream, Tnuva was declared a monopoly in 1998.

The ruling imposed special legal restrictions on its ability to charge prices that are deemed unreasonable.

Tnuva commands about a 50% share of the white cheese market and 70% of the sweet cream market.

Tnuva dairy products.Credit: Hagay Frid

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