The Israel Antitrust Authority (''IAA'') has
announced its intention to impose a financial sanction in the sum
of NIS 25,640,000 on Bitan Wines, due to its violation of the terms
of the merger between Bitan Wines and the Mega supermarket
In January 2016, the Mega supermarket chain entered a procedure
freezing and, as a result, the majority of its assets were acquired
by Bitan Wines. The General Director's approval for the merger
was granted on the condition that Bitan Wines will sell branches in
eight different localities where Mega and Bitan Wines have
Despite the fact that the deadline for fulfilling the merger
conditions has passed, Bitan Wines has only fulfilled its
obligation in relation to the sale of branches in the vicinity of
Herzliya. The branches that it was obligated to sell in all other
localities have not yet been sold. Consequently, Bitan Wines
violated the terms of the merger.
According to the IAA, the potential negative impact on
competition as a result of the actions of Bitan Wines is clear and
evident, since the IAA had ordered the sale of branches only in
areas where it believed that the merger between Bitan Wines and
Mega would undermine regional competition. Therefore, deferring the
sale of such branches and leaving them in the hands of Bitan Wines
causes an obvious concern that competition is being significantly
The IAA's intention to impose a financial sanction of the
magnitude of dozens of millions of shekels is further evidence of
its strategy of imposing increasingly stricter punishments for
violations of the Restrictive Trade Practices Law. One may recall
that, not long ago, the court had sentenced senior officers of the
Shufersal supermarket chain to actual prison time for their
breaches of conditions stipulated by the Antitrust General Director
when he approved the merger between Shufersal and Club Market.
This trend of imposing stricter criminal and administrative
punishments underscores the importance of prudent conduct and
strict compliance with the Antitrust General Director's
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