Competition Commissioner Considers Declaring Carmel Wineries a Monopoly, Subject to Hearing

The Competition Commissioner, attorney Michal Cohen, announced today, Tuesday, to Carmel Wineries that she is considering declaring it a monopoly in the supply of must and wine for Kiddush, subject to a hearing. The notice was sent to the Cooperative Association of Winemakers of Rishon LeZion and Zikhron Ya'akov wineries, after the authority’s examinations found that Carmel Wineries holds more than half of the supply in these markets and, apparently, significant market power.

The Competition Authority noted that similar findings had already emerged during the review of the merger between Carmel Wineries and the Erza winery, and had even received the approval of the Competition Tribunal. According to data collected recently, Carmel Wineries’ position in the relevant markets has remained stable, and its market shares have even increased.

A monopoly declaration is mainly declarative, since the obligations that apply to a monopoly holder under the Economic Competition Law can also apply without an official declaration. However, in Carmel Wineries’ case, the declaration may have additional significance, as it would place the company under the obligations and prohibitions set out in the Law for the Promotion of Competition in the Food and Pharmacy Sectors, the Food Law, in relation to the markets in which it is declared a monopoly.

As of today, Carmel Wineries is not defined as a “large supplier” under the Food and Pharmacy Law, and therefore the rules that apply to such suppliers do not apply to it. If it is declared a monopoly, it would be subject, among other things, to prohibitions on interfering with shelf placement in grocery chains, conditioning the sale of one product on the purchase of another, interfering with the final consumer price, and additional restrictions set out in the law.

The move follows the declaration of Wissotzky as a monopoly in June 2023, after which the company was also designated a large supplier under the Food and Pharmacy Law. Any declaration regarding Carmel Wineries, if approved, will be made only after a hearing before the Competition Commissioner.