Bread Scandal Births Class Action Bid

A request to file a NIS-500 million class-action suit against the Angel and Berman bakeries was submitted yesterday in the wake probe into allegations of price-fixing among at least three big commercial bread bakeries.

In their request the plaintiffs said they have been buying Angel and Berman bread. The companies sell very similar, if not identical, products, sometimes for the exact same price. For example, both charge NIS 16.29 for a loaf of light challah and NIS 17.29 for a loaf of nut bread. These bakeries practically control Israel's bread market, with a combined market share of more than 70%, the petition says.

They cite the Antitrust Authority's suspicions - that Angel and Berman, along with another bakery, Merhavit, formed a cartel, coordinated bread prices and stymied competition. As a result, consumers overpaid significantly for bread products, they say.

The potential plaintiffs estimate that as a group they overpaid by NIS 1,500 for the bakeries' products over the past four years. They do not explain their calculations, but estimate the damage to Israeli consumers as a whole as at least NIS 500 million.

Yitzhak Berman, the owner of the Berman bakery, was questioned under caution. The Antitrust Authority has not sought to have him arrested, since it believes he did not play a dominant role in the affair. CEO Yehuda Schneiderman, however, was arrested and taken into custody. Senior executives were also summoned for questioning.

Angel Bakery CEO Yaron Angel and Merhavit Bakery CEO Yohanan Aharonson were released to house arrest.

The Antitrust Authority made its investigation into the bakeries public this week. In addition to price-fixing, the bakeries allegedly sliced up the local bread market among themselves, focusing in particular on price-controlled products.

The bakeries are also suspected of halting a sales campaign during which they sold three of the subsidized loaves for NIS 10, mainly in Jerusalem's poorer, religious communities.

The bakeries have responded that the allegations of price-fixing of controlled prices are ridiculous.