Moments before the holidays: Monopoly restrictions to be imposed on Carmel Winery
The Competition Authority intends to declare Carmel Winery a monopoly in the grape juice and Kiddush wine market. The company has agreed to comply with major supplier regulations pending a Supreme Court ruling.
After notifying Carmel Winery of its intention to declare it a monopoly in the category of grape juice and wine for Kiddush, the Competition Commissioner, Michal Cohen, published today (Tuesday) for public comment a consent decree with the company. Under this decree, Carmel will accept the provisions of the monopoly chapter of the Competition Law and will be defined as a large supplier under the Food and Pharma Law, which will require it to comply with the obligations applicable to a large supplier.
The move comes at a particularly sensitive time for Carmel Winery, just a few weeks before Rosh Hashanah – a period considered the peak sales season for grape juice and wine for Kiddush. The Competition Commissioner's notice to Carmel regarding the intention to declare it a monopoly comes against the backdrop of the Competition Authority's decision to oppose the merger between Carmel Winery and Arza Winery.
The Authority's investigation revealed that Carmel holds over 50% of the market for grape juice and wine for Kiddush and possesses significant market power. The Competition Tribunal did not change the conclusions regarding Carmel's status. The parties agreed that until the Supreme Court rules on the appeal by Carmel and Arza against the Competition Tribunal's verdict, Carmel Winery will accept the provisions of the monopoly chapter of the Economic Competition Law and will be recognized as a large supplier under the Competition Law.
From now on, the obligations applicable to large suppliers will apply to the winery regarding grape juice and wine for Kiddush products. In particular, the company will be prohibited from:
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Interfering with shelf arrangements in food chains.
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Conditioning the sale of a specific product on the purchase of another.
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Influencing the final price of the product to the customer in food chains.
If the Supreme Court upholds the conclusions regarding its status, or if the ruling does not fundamentally change the conclusions reached by the Authority, Carmel will waive the right to a hearing and to file an appeal and will accept the decision. In the event that the Supreme Court overturns the Competition Authority's conclusions, the consent decree will expire.
