Consumer Protection and fair trade authority to soft drink companies: stop the prices increase

The Authority for Consumer Protection and Fair Trade announces its intention to issue an administrative order to stop the violation to the three soft drink companies that dominate the category - the Central Company for the Production of Soft Drinks Ltd., Tempo Beverages Ltd., Yapaura-Taburi Ltd. The companies must return the price to its original value immediately As the price increases and cancel the planned price increase.
The companies' decision to raise the prices of their products at the same time, when all three control the vast majority of this market, harms the consumers' freedom of choice, and the consumers are forced to purchase the products despite the price increase, which constitutes an unfair influence on the Israeli consumer.
The companies market and sell a variety of beverage products including carbonated drinks, soft drinks, alcoholic beverages, water and more, either by themselves or through subsidiaries. Over the years the companies have become dominant in the category and a significant and powerful factor in the field of soft drinks, some of them in a variety of types of drinks.
During the month of March-April 2023, the companies simultaneously announced the increase in the price of various soft and carbonated drinks produced by them. The three companies dominate the soft drinks category completely. The companies issued a similar announcement about raising the prices of their products, this move resulted in the price of the said products on the part of all the companies.
The violations - these acts of the companies constitute an unfair influence on the Israeli consumer: Section 3(a) of the law prohibits a dealer from exerting an unfair influence. The provisions of the section forbid a trader to carry out, by act or omission, in writing or orally or in any other way, something that may harm a consumer's ability to make a decision whether to enter into a transaction with him, in a way that negates the consumer's freedom of contract or substantially impairs his freedom of contract.
The companies' decision to raise the prices of their products at the same time, when all three control the vast majority of this market, harms the consumers' freedom of choice, in that the consumers are practically forced to purchase the products despite the price increase, which constitutes an unfair influence on the Israeli consumer.
Another unique violation of the central company for the production of soft drinks (Coca Cola) - over the years the company has become a significant and powerful factor in the field of soft drinks, through a variety of actions, some aggressive, that it has taken to promote its products in the market, the practical and cognitive influence of the company on the consumer, harming the consumer's ability to choose and in his freedom of communication. Under these circumstances, raising the price of the products constitutes an unfair influence on the Israeli consumer. Required actions: The companies must immediately cancel the planned price increase.
Where a price increase was made, the companies must return the price to its original value immediately. Provide references within 14 days from the date of issuing the administrative order, which testify to its implementation. Due to the violation of the instructions in the administrative order to stop the violation, a financial sanction will be imposed at a rate of three times the amount of the financial sanction due to the violation or, alternatively, criminal proceedings will be initiated. The company may submit its arguments in writing regarding the cancellation of the intention to issue an administrative order to stop the violation, within 7 business days from the date of delivery of the notice.
Anita Yitzchak, deputy commissioner of the Authority and head of the Investigations and Intelligence Division, said that: "The Authority will not allow companies to exploit their power and leave the consumer without freedom of choice. These companies control the soft drinks category completely and by raising the prices at the same time in fact they have almost completely closed off all options to the consumer and violated the consumers' freedom of choice, as a result the consumer was left with no choice and the consumers were forced to purchase the companies' products despite the price increase. In the Authority's view, this is an unfair effect on the consumers and the law gives the Authority tools to deal with this violation and that is what we did. The Authority continues to check the manner of their activities at all times of the various companies and in particular the price increases and examines whether there are other cases that violate the law and require its intervention."