Class action suit accuses Israeli Coca-Cola manufacturer of price gouging

A 1.5 liter bottle of Coca-Cola cost roughly 40% more than the same amount in the United States.

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August 4, 2016 17:04
1 minute read.
Coca Cola

Coca Cola. (photo credit: REUTERS)

An activist consumer on Wednesday filed a class action suit against the Central Bottling Company – the Israeli manufacturer of Coca-Cola – for alleged price gouging.

“The exorbitant price of the Cola beverage in Israel is not preordained and does not come out of thin air,” said the lawsuit filed by Ronen Gafniel at the Central District Court in Lod.

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“It is created through a monopoly and is the direct result of it [the company] abusing monopoly power in order to set exorbitant prices that are unfair.”

The NIS 450 million suit alleged that in Israel, Coca-Cola is considerably more expensive than other international locations, despite having similar production costs. Among 70 countries, it said, only Norway paid more.

According to the lawsuit, a 330 ml. can of Coca-Cola anywhere in the world costs NIS 2.64 on average, as compared with NIS 4.90 in Israel, an 86 percent difference.

A 1.5 liter bottle costs roughly 40% more than the same amount in the United States.

According to a Channel 10 report, attempts by competitors to import Coke from manufacturers in nearby countries such as Greece have been wrapped up in bureaucratic hurdles, making it harder to force the price down for one of the most popular beverages in the country.

One importer, who has managed to import one container thus far, sold cans of Coke to retailers for NIS 0.50 less, but said it took eight months to get through all the red tape.

The number of less expensive cans was a drop in the bucket compared to what is produced in Israel, and unlikely to bring down the price.

Whether Coke is the cottage cheese – high prices of which led to boycotts and protests in 2011 – is in question. It is not a staple food in the Israeli diet. Still, the high cost of Coca-Cola exemplifies a common problem in the Israeli consumer market, where in many case a certain product is concentrated in the hands of one company, while importers are limited in their ability to compete. The result is higher prices for the consumer, and better-lined pockets for the monopolist.


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