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Israeli authorities indict bakeries over price-fixing ‘bread cartel’

By Nathan Gray , 31-Aug-2012
Last updated on 31-Aug-2012 at 12:25 GMT2012-08-31T12:25:16Z

Several Israeli bakery chains have been issued with charges by the anti-trust authorities over accusations of collaborative involvement in the price fixing of bread products and anti-competition activities.

Top Israeli bakery chains – including, Berman, Ahdut, Dganit Ein Bar – have been charged with collaborating to raise regulated price of plain white bread and halla. The firms have been summoned to the Jerusalem District Court to face the charges over charges of setting prices, preventing competition and dividing up the country's bread and baked-goods market among themselves.

According to the indictment issued by the Israeli Antitrust Authority, Angel Bakeries CEO Yaron Angel, Berman's Bakery CEO Yehuda Schneidman, Merhavit Bakery chairman CEO Yohanan Aharonson and Davidovich Bakery CEO Shaike Davidovich together with other, smaller bakeries, conspired to establish a cartel.

Smaller bakeries, including Davidovich, Alumot, Oranim and Merhavit were also indicted.

Covert meetings

Bakery executives are accused of dividing the customer base equally among hem and collaboratively working to raise the price of plain white bread and challa – a popular braided bread eaten on Jewish holidays. 

The bakery bosses are accused of involvement in the cartel through a series of covert meetings held at secret locations across Israel. The executives allegedly met in coffee shops, a gas station on the Trans-Israel Highway and even in lawyers' offices to work out the scheme.

Several of the executives suspected of involvement in the cartel have been arrested since the Israel Antitrust Authority started investigating the allegations in June 2010.

Price increase

The news of the fresh indictments comes as activists in the country have been calling for Shalom Simhon, Israel's Trade and Industry Minister to cancel a planned 6.53% increase in the cost of government-regulated white bread.

The price rise, which is the first for several years, has been put down to higher ingredients and fuel costs forcing the decision. However the move has attracted criticism from consumer groups.

“The fact that bread can be sold cheaply, combined with the decision to indict three big bakeries, shows that the bakeries’ price was exaggerated and based on a distorted prediction of rising wheat costs worldwide,” said protest group ‘Israel is Dear to Us’ in a statement. 

“Abroad, healthy bread made of whole wheat can be bought for a price that is cheaper than the price of plain white bread in Israel,” the statement read.

The country has been subject to widespread protest against food prices in the past year.

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