Israel’s Antitrust Commissioner Dror Strum is publishing a code of practice regulating the relationship between retail food chains and suppliers.
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The new code, for the first time in Israel, will specify which practices of those used over many years violate the antitrust laws. It will prohibit a long-standing practice whereby chains will allow leading food manufacturers to organise the shelves in its category.
In addition, the new code is expected to prohibit chains from demanding payment from suppliers for allocated shelf-space, and terminate “exclusivity guarantees.” Chains will not be allowed to guarantee that the products of a certain company will be the only ones on display next to the cashier, “and manufacturers will not be allowed to dictate consumer prices,” as noted in a report in Haaretz.
An executive of one of the food companies, that is likely be affected by the new code, commented: “Since the food industry is on the brink of the abyss, the new code should be designed to create a stable sector with a healthy long-term competition, fair trade relations and stable prices rather than populist competition that would cause the entire industry to crash.”
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By GlobalData
