Economy and Trade Minister Naftali Bennett on Thursday requested that antitrust
commissioner David Gilo to investigate reported price-fixing among the major
coffee chains in Israel.
The request follows a report in TheMarker that
coffee shop executives regularly shared information and discussed whether or not
they would lower prices following the entry of discount coffee house Cofix to
“This morning, I was surprised to read in the media that
leaders in the coffee chains exchanged messages, ostensibly to coordinate and
keep the price level as high as it is today,” Bennett wrote Gilo in a letter.
“The things described above, if they are true, harm the government’s stated
policy of dealing with the cost of living, and may break the law.”
quoted Café Café owner Ronen Nimni saying, “We [the coffee
shop executives] are online, on the phone, I talk with them and we’re in touch
He continued: “Ultimately we’re all friends, we’re all
together. All the big chains, we’re all in touch and we’re all talking and no
one is going to reduce prices.”
According to the report, coffee chains
make up less a third of Israel’s coffee shops, though they take in 70 percent of
By working together to keep prices fixed instead of competing,
a term known as collusion, the chains ostensibly form a cartel.
they benefit from keeping the prices high, they harm the consumers. The entry of
Cofix, which offers coffee (and everything else on its menu) for NIS 5 – less
than half the price of coffee at the big chains – might have otherwise
encouraged the bigger chains to drop their prices to keep from losing
Many governments outlaw collusion, the same way they work to
break up monopolies.
Upon the opening of the first store last week, Cofix
CEO Avi Katz told The Jerusalem Post
that he was convinced its success would
force established coffee shops to bring down their prices.