El Al Serves Wine From Owner's Private Winery, Citing 'Negligible' Deal
Translated & summarized from TheMarker by baba
El Al is serving wine from Trankal Winery, owned by its controlling shareholder Kenny Rosenberg, on its flights. The airline claims the deal is financially "negligible" and thus not requiring public disclosure, despite its significant marketing value for the small winery. The agreement was approved by El Al's board and is set to continue until March 2025. El Al maintains that the selection process is professional and commercial, adhering to all legal and corporate governance standards.
The story in 5 lines · by baba
- El Al is serving wine from Trankal Winery, owned by its controlling shareholder Kenny Rosenberg.
- The airline classifies the deal as "negligible" and not requiring public financial disclosure.
- The agreement for Trankal Winery's wine to be served on flights runs until March 2025.
- Trankal Winery is a small, relatively new boutique operation in the Galilee.
- Getting onto El Al's menu is considered a major marketing opportunity for small wineries.
El Al, Israel's national airline, is currently serving wine from Trankal Winery, a boutique winery located in Moshav Tzuriel in the Galilee. The winery is owned by Kenny Rosenberg, the controlling shareholder of El Al. The agreement for Trankal Winery's wine to be supplied to El Al's flights was approved in April 2024 by the company's audit committee and board of directors, with the contract set to run until March 2025. Despite the initial approval, El Al has not reported on the continuation of this agreement, even though the wine is still being served on flights.
When questioned about the lack of reporting on the renewed agreement, El Al stated that the transaction's value is considered "negligible" according to the company's procedures for minor deals, thus not requiring disclosure in financial reports. The airline previously reported the deal out of "excessive caution," a level of diligence management apparently no longer deems necessary. While such a deal between a company and a party with significant influence or personal interest typically requires disclosure if deemed material, El Al's annual turnover of 3.5 billion shekels means that even a deal worth hundreds of thousands of shekels, while substantial for the small winery, does not meet the numerical threshold for materiality, which is generally around 5% of the company's revenue.
The significant increase in El Al's revenues, reportedly boosted by $1 billion between 2023 and 2025 due to the war, may also have contributed to the deal no longer being classified as material. While numerically insignificant for the airline, the inclusion in El Al's menu represents a major marketing coup for Trankal Winery, a relatively young operation whose first vintage was released in 2020. Industry sources describe getting onto El Al's wine list as a challenging and highly valuable opportunity, offering significant brand exposure to a captive audience of hundreds of passengers per flight.
El Al responded by stating that wine selections for its menu are made based on professional and commercial considerations, including wine quality and suitability. The airline confirmed that the agreement with Trankal Winery was reviewed and approved by the company's authorized bodies years ago, in accordance with legal requirements, corporate governance rules, and company procedures.