Israel's Supersol supermarket chain has cancelled negotiations to control the Rami Levi Marketing food chain, following the recent decision by the government's Anti-Cartel director Dror Shtrum blocking Blue Square's purchase of the Haviv Supermarket discount chain.

A report in Ma'ariv notes that Supersol intended to purchase 51% of the family-owned Rami Levi company, which operates food stores in the Jerusalem region.

Last week, Shtrum ruled against a merger between Blue Square and Haviv. Shtrum cited two factors in the decision, which marked the first time a government agency has intervened in the sector: concerns over the ability of large chains to exert pressure on suppliers; and the fact that large chains control over 50% of the local food market yet "competition in a free-market economy is vital."

By Aaron Priel, just-food.com correspondent