Naftali Bennett Vows to Dismantle Monopolies but Faces Complex Realities

Former Israeli Prime Minister and party leader Naftali Bennett recently delivered a strong message against monopolies, specifically targeting Brightfood, which acquired Tnuva, declaring that "your celebration is over" and promising no more monopolies controlling other monopolies under his watch. Bennett has repeatedly pledged aggressive actions against monopolies, including breaking and dismantling them, though his declarations have not always been matched by operational steps. His party's platform includes practical measures like banning large importers from distributing multiple monopolistic brands and preventing monopolies from dominating multiple sectors.

Bennett often cites his role in dismantling the Nesher cement monopoly as proof of his effectiveness. Nesher, founded in the 1920s, controlled up to 90% of Israel's cement market by 2013. When Bennett became Minister of Economy in 2013, he adopted recommendations from a government committee to promote competition, including easing import restrictions and selling Nesher's Har-Tov plant. These moves, supported by the Israeli Competition Authority, led to a significant market share drop for Nesher to below 50% by 2020, increased competition, diversified supply, and a 20% price reduction over five years.

Experts emphasize that the Competition Authority played the leading role in enforcing these changes, with Bennett supporting market-opening policies and resisting protective tariffs that would have shielded Nesher from import competition. The key to success was not just dismantling assets but enabling effective import competition.

However, defining and dismantling monopolies remains complex. Israeli law defines a monopoly as a company holding over 50% market share or significant market power, but determining market boundaries is challenging and often litigated. The "hypothetical monopoly test" is used to assess market definitions, but gathering evidence and legal processes are lengthy and resource-intensive.

According to economists, dismantling monopolies is a drastic and rare step. More common and sometimes more effective tools include removing import barriers, stricter merger controls (especially for conglomerates), and imposing behavioral obligations on dominant firms to prevent abuse of power. For example, in sectors like natural gas and car imports, separating ownership or limiting brand concentration could enhance competition. Agricultural markets could also benefit from reducing import restrictions and reforming price coordination practices.

Ultimately, experts argue that combating monopolies requires a combined approach of regulatory enforcement, market opening, and legislative action rather than relying solely on dramatic breakups. Bennett’s past success with Nesher illustrates the importance of enabling competition rather than just dismantling companies. The real test of political promises to break monopolies lies in the practical tools and policies chosen to increase market competition and consumer benefit.