The competition authority: reduced the fine on Coca Cola israel by 11 million Shekel

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by Ifi Reporter Category:Financial Apr 16, 2019

The competition authority decided to reduce the administrative fine it is considering to impose on Coca-Cola Israel for the abuse of monopolistic power and breach of the terms of a merger with Neviot. This emerges from a revised letter of hearing sent today to the Central Bottling Company, which markets Coca-Cola products in Israel.
According to the amended version, the Authority decided to retract its intention to impose a fine of NIS 340,000 on the CEO of the distribution company, Nir Levinger.The decision on the amended fine is also subject to a hearing, according to the Authority, for presenting some of the violations in a different manner than the original wording - additional.
According to the announcement of the competition authority, Michal Halperin gave the central company an amended statement that it is considering that the central company has abused its status as a monopoly in the Coca Cola market and refused unreasonably to supply the product.
"The central company," says the announcement, "is the dominant factor in the field of soft drinks in Israel, and its main brand, Coca-Cola, is a strong brand with market power
 The central company also supplies other brands of carbonated beverages, which also have market power and high sales volumes. The central company also dominates its cold tea through the Fusion brand, which also has a significant sales share. As part of the Central Company's soft drinks basket, it also provides juices, soda and mineral water. In these products, the central company's market power is weaker and it is exposed to more competition from other players in the field - such as Jafora and Tempo. "
"Looking at the total basket of soft drinks marketed to points of sale," the company says, "the central company supplies about two-thirds of the market while the rest of its competitors share the remaining third of the market."
According to the notice of the hearing, the central company violated the law in four ways. "The central company apparently used its power towards the retail points of sale - in order to push the products of the competitors from the points of sale.The central company did so in a variety of ways: Among other things, the company included in agreements with points of sale a condition under which the company may cancel the agreement Significant purchases from the company.
"The Central Company banned (or at least significantly limited) the introduction of competing products into the refrigerators it provides to its customers." The Authority's examination found that at most points of sale there is no refrigerator other than the central company's refrigerator where they can put competing products, Jafora and Tempo for cooling their products.
The second violation relates to an attempt to influence restaurants to produce brand-name Nesste dispensers marketed by Osem. "The company allegedly operated specifically against Neste's pouring devices, which was marketed by the rival company Osem, and by 2012 the brand Nesty was jointly owned by Coca Cola and Nestlé, and in 2012 the partnership was dissolved and it was determined that Coca Cola will continue to hold the rights to the flavor formula of the beverage While Nestle will continue to hold the Neste brand.
The third violation concerns the blocking of parallel imports. "The company allegedly abused its position when it adopted a policy of halting the supply of carbonated beverages to customers who sold Coca-Cola products from parallel imports, which was listed in a policy document called" Parallel Import Procedure "that was composed in 2009. The central company used the policy as a threat to its customers, Her voice from imports parallel and even realized this threat.
The fourth violation concerns the terms of a merger with Neviot. In addition, the company ostensibly violated instructions given to it, terms that were conditioned on its merger with Neviot, and an agreed order signed with it in the past, by concluding exclusive agreements with certain customers and also using a pricing method whereby a customer might receive a greater discount on Coca-Cola Also the products of Neviot. "
"The Central Bottling Company is pleased that following a hearing held in the past, the Authority canceled its previous decision, and we understand that a new decision has not yet been received, and we are convinced that this time too our claims will be accepted, The provisions of the Competition Law and the orders issued thereunder, and that the claims of its senior manager were accepted in full and it was decided not to take any action against him. "

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