Watchdog Probing Possible CEO Role in Supersol Coercion

The Antitrust Authority is investigating the role Super-Sol CEO Efi Rosenhaus may have played in the company's alleged habit of forcing suppliers not to cooperate with arch-rival Blue Square. Super-Sol reportedly hit the suppliers where it hurt - their interface with shoppers, by the simple mechanism of yanking their products from store shelves.

Super-Sol is suspected of advising major suppliers including, Coca-Cola, Osem and Wissotzky, that if they allowed special sales of their products through Blue Square, then Super-Sol - the bigger chain - would punish them by purging their products from its shelves.

The question here is whether Rosenhaus played a direct role, but in any case the trustbuster's position is that he bears "ministerial responsibility."

If the CEO told suppliers to limit their work with the rival chain, he violated the terms of Super-Sol's merger with Clubmarket.

One of the Antitrust Authority's conditions for approving the merger in late 2005 between Super-Sol, already Israel's largest retail chain, with Clubmarket, which had been the third-biggest before going bankrupt, was that Super-Sol refrain from abusing its clout in the marketplace.

Another trustbuster proviso was that Super-Sol sell off 15 of the 97 Clubmarket outlets, which had they remained in Super-Sol's hands would have created localized monopolies, as Antitrust Commissioner Dror Strum explained at the time.

Limiting the suppliers' activity is bad enough: Threatening them with punishment, in the form of preventing shoppers from obtaining their goods, is a whole other level of violation.

The Antitrust Authority, now headed by Ronit Kan, began its investment in January this year. During the probe, the inspectors heard testimony from suppliers about Super-Sol's habit of removing their products from its shelves.

Super-Sol argued that its conduct is based on economic considerations, not vengefulness.

Theoretically, Super-Sol's activity vis-a-vis suppliers is handled at the top of the middle-management level, by deputies to the chief executive. However, the Antitrust Authority feels that Rosenhaus calls the shots. That is why the trustbuster is focusing its microscope on him, as the party responsible for Super-Sol's conduct.

A spokesman for Super-Sol stated that the company has no information on the issue. The Antitrust Authority refused to comment.