Indictment in Israel for Attempted Price Coordination via Media and Food Law Violations

On February 19, 2025, the Competition Authority filed an indictment against leading retail chains, including Victory and Yochananof, and against some of their senior officers. At issue is a precedent-setting indictment since, in addition to the charges in respect of “classic” offenses of price coordination between competitors, charges were filed for the first time (against the Victory chain and against its owner and CEO, Eyal Ravid) for attempting cartel arrangements through public statements about expected price hikes and, for the first time, charges were also filed in respect of violations of the Promotion of Competition in the Food and Pharmaceutical Industries Law of 2014 (“the Food Law”) – violations that, up until now, have resulted only in administrative penalties.

The charges in the indictment

The indictment, which includes seven charges, was filed against the Victory food chain and against Eyal Ravid, the chain’s controlling shareholder and CEO, against the Yochananof chain and against Eitan Yochananof, the chain’s controlling shareholder and CEO, against Elad Harazi, Yochananof’s deputy CEO, as well as against the Super Bareket chain and against Ephraim Tshuva, the chain’s CEO.

The charges included in the indictment are divided into four sections.

The first section includes a precedent-setting charge against Victory and Eyal Ravid, accusing them of attempting to set up a cartel arrangement with retailers and suppliers through a series of public statements by Eyal Ravid during interviews in the media and on social networks, in which he predicted price hikes in the food chains. Sometimes, Ravid even mentioned the expected height of the price hike or the desired rate of the hike. The Competition Authority maintains that Ravid conveyed a message to suppliers and retailers through his statements regarding his desire to raise prices in furtherance of Victory’s goal of forming a cartel arrangement with suppliers and other retailers to hike prices.

The second section, which is also precedent-setting, addresses violations of the Food Law. Inter alia, the Food Law prohibits retailers from intervening with a supplier’s price at which another retailer will sell products to consumers. According to the indictment, in three different instances – with the suppliers Dr. Fischer, Schestowitz and Beit HaShita – Ravid intervened with the price at which these suppliers would sell their products to the Yochananof and Rami Levi chains, or the prices at which these retailers would sell these products to consumers.

The third section addresses charges of cartel arrangements between Victory and Yochananof, and between Victory and Super Bareket. One charge relates to an arrangement between the Victory and Yochananof chains, in which they coordinated to not launch any additional sales promotions other than those that they had already decided on in any case. The second charge relates to an arrangement between Victory and Super Bareket, which alleges that they hiked the prices of disposable utensils in response to the tax increase imposed on these utensils.

The fourth section includes charges against the officers of the companies accused of violating the duty imposed on them pursuant to the Competition Law to supervise and exert all efforts to prevent violations of the law by the company or by any of its employees.

The indictment’s implications

Beyond the public resonance resulting from the filing of indictments against leading retail chains in respect of manipulative business tactics that allegedly were intended to harm consumers, this is a precedent-setting indictment that signals that the Competition Authority is tightening its criminal enforcement policy in relation to violations of the Competition Law and in relation to violations of the Food Law.

As stated, this is the first time that an indictment includes a charge in respect of an attempt to create a cartel arrangement through public statements.

In recent years, the Competition Authority has stated numerous times that it intends to take criminal enforcement measures not only against competitors committing “classic” offenses of coordination, but also against competitors that attempt to coordinate business tactics with their competitors through the media (and, in the instance of public companies – even through reports filed by virtue of the Securities Law). In less than a year – in 2023 and 2024 – the Competition Authority held three hearings before filing an indictment on suspicions of attempting to set up a cartel arrangement through public statements: against Strauss and former officers (statements in the media and in financial statements); against Willy Food and its controlling shareholder, who is also the CEO (media interviews), and against Victory and Eyal Ravid (statements in the media). And now, the first indictment has been filed – against Victory and Eyal Ravid.

By doing so, the Competition Authority is making it crystal clear that it will not tolerate prohibited information exchanges in any media between competitors that could harm competition, and that it will enforce this prohibition through criminal indictments.

This is also the first time that the Competition Authority is instituting criminal enforcement measures in respect of violations of the Food Law. Up until now, violations of this law have been enforced by administrative measures, including the imposition of fines. In the past year alone, the Competition Authority has reached agreements with suppliers with regard to payments of fines to the State’s coffers for violations of the Food Law at sums totalling tens of millions of shekels.

For the first time, violators of the Food Law are being exposed to prison sentences of up to three years. It is reasonable to assume that the Competition Authority chose the most drastic enforcement measures particularly in this case, since the indictment alleges systematic violations of the Food Law intended to trigger price hikes (in addition to violations of the Competition Law with the same intention by the same offender). It is also obvious that the Competition Authority is sending a clear message to both retailers and suppliers in the food sector that it will vehemently enforce the provisions of the Food Law – even to the point of filing criminal indictments.

The indictment’s implications for companies and officers

The indictment, inclusive of its precedent-setting aspects, signals to companies and officers that they should re-examine their exposure deriving from the Competition Law and the Food Law and ensure that they conduct themselves in a manner consistent with the magnitude of their exposure.

With reference to the Competition Law, the indictment clarifies that public statements – which are often spontaneous, unscripted and without prior consultation – could pose a risk of a criminal violation of the law. Companies and their representatives must internalize that, in order to reduce the risks of statutory violations, they must scrutinize the contents of their statements and the forum where they have decided or have been invited to express themselves. Furthermore, considering the liability that the Competition Law imposes on a company’s officers who failed in their duty of supervision – even if they had no involvement in the violation itself – directors’ duty of supervision should be expanded to apply to actions by the company’s representatives and their statements in the various media.

With reference to the Food Law, the indictment represents a dramatic “leap forward” both for the relevant corporations and their officers. Now, more than ever, criminal exposure resulting from violations of the Food Law’s provisions must be taken into account—an exposure that entails the “Via Dolorosa” of criminal investigations and hearings, and, most significantly, the risk of imprisonment and substantial fines. This exposure necessitates a deeper integration of the Food Law’s provisions into the DNA of the relevant corporations, including within their internal compliance programs..

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Barnea Jaffa Lande’s competition and antitrust department is at your service to answer any questions about provisions of the Competition Law or the Food Law.

Adv. Gal Rozent heads the competition and antitrust department.

Adv. Ran Karmi and Adv. Yarden Anavi are associates in the department.