The Israel Antitrust Authority said Sunday it planned to impose a giant, 25.6-million-shekel ($6.9 million) penalty on the grocery chain Yenot Bitan for violating antitrust rules in connection with its takeover of the Mega chain.
On top of the fine on the company, the authority said it would fine Nahum Bitan, the controlling shareholder of the closely held supermarket chain, 700,000 shekels.
The unusually stiff penalty is due to Yenot Bitan’s failure to meet the conditions regulators set in July when the company took over most of the stores in the now-defunct Mega chain, the authority said. The takeover turned Yenot Bitan overnight from a medium-sized food retailer into Israel’s second-largest, with some 200 stores.
The antitrust agency had ordered Yenot Bitan to sell off stores in eight geographical areas, citing concerns that the Yenot Bitan and Mega stores would have a preponderance of local market share if they were all under the control of Yenot Bitan.
The Israel Antitrust Authority said that Yenot Bitan divested stores in the Herzilya area but had not yet sold off stores in the seven remaining regions.
The supermarket chain, which will have a chance to present its counterclaim before a final decision, said Sunday in a response that it was “and will continue to act to meet the demands of the authority and the law.”