Antitrust Authority expands Tnuva probe to price hikes

The investigation was opened before the start of the cottage-cheese boycott last summer.

By ILANIT HAYUT / GLOBES
January 11, 2012 03:25
1 minute read.
Antitrust Authority expands Tnuva probe to price hikes

Tnuva milk bags 298.88. (photo credit: Ariel Jerozolimski)

 
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The Antitrust Authority is expanding its investigation into Tnuva Food Industries Ltd., people familiar with the matter told Globes Tuesday. More than 20 persons have been questioned or provided evidence since the investigation began, they said.

The investigation was opened before the start of the cottage-cheese boycott last summer, when Tnuva asked the Antitrust Authority to review its monopoly status, claiming that it no longer dominated the dairy market, the sources said.

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Tnuva is classified as a monopoly in the dairy industry because it controls 56 percent to 57% of the market.

It said it no longer dominated the yogurt market, where Strauss Group Ltd. had the biggest share as the franchisee of Danone. Tnuva also said Strauss dominated the puddings market.

As part of the investigation, the Antitrust Authority asked all dairies for data after Globes revealed that a report by McKinsey & Company for Tnuva had advised that it could raise prices for products without harming demand. In addition, after Tnuva was acquired by Apax Partners, Tnuva executives were told to present a “100-day plan” to create value.

The plan was nicknamed “quick wins.”

Last September, the Antitrust Authority opened an investigation into Tnuva on suspicion of concealing information. It questioned former Apax Israel CEO and Tnuva chairwoman Zehavit Cohen under caution. After the investigation was opened, Tnuva handed the McKinsey report to the Antitrust Authority.

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The Antitrust Authority may investigate changes in prices between government- controlled yellow cheeses and unsupervised cheeses. A Globes investigation found that the price of government-controlled Emek yellow cheese was unchanged between 2008 and last summer (a price that should reflect the cost of raw materials), while prices rose 11.5% for Emek cheese, 15% for white cheeses and 11% for cottage cheese.

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