Israel's Competition Authority Recommends Barring Gadot and Dor Chemicals from New Haifa Terminal

Israel's Commissioner of Competition, Michal Cohen, has recommended that the Gadot Group and Dor Chemicals be prevented from establishing and operating a new public chemical terminal in the Port of Haifa. The recommendation was sent to Israel Ports Company (IPC) ahead of a tender for the northern terminal's construction. The Competition Authority stated its aim is to prevent market power concentration among companies already involved in chemical unloading and storage, and in Gadot's case, also in chemical trading.

The authority believes that entities already possessing coastal chemical unloading and storage capabilities should not be granted rights to the new terminal, as they could become competitors. Furthermore, it is advisable to avoid granting rights to a company active in chemical trading, due to concerns about pushing out competitors. The new terminal is strategically important for the economy, set to replace the southern terminal which will cease operations due to regulatory changes. It will be the sole facility in Israel offering universal public services for unloading, loading, and storing bulk chemicals imported via ships to coastal tanks.

Currently, Gadot and Dor Chemicals operate at the northern terminal, possessing private storage tanks. The Competition Authority warns that granting the concession to either company could harm competition on two fronts. Horizontally, an operator already with coastal tanks might reduce the number of competitors in the unloading and storage market. Additionally, there's concern that Gadot, a dominant trader of liquid chemicals, could exploit control over the terminal to disadvantage rival traders and independent end-customer imports, thereby strengthening its position in the chemical trading market.

Consequently, the Competition Authority recommends favoring an operator that does not currently hold infrastructure at the northern terminal and is not significantly involved in chemical trading. It also requested IPC to provide a list of candidates after the tender is published for review of their identities and business affiliations. In parallel, the authority suggests expanding unloading options within existing infrastructure. Currently, companies with northern coastal tanks are authorized only for self-use unloading. Modifying their permits to serve external companies could increase unloading options for importers and traders, boosting competition. This current recommendation aligns with the authority's 2018 stance that Gadot's operation of the southern terminal already significantly harms competition.