SuperPharm Loses Exclusive Grip on Malls

SuperPharm headquarters in Herzliya. (David Shai)

Under threat of monetary sanctions from the Israeli Antitrust Authority, the SuperPharm drug chain has agreed to relinquish its exclusivity contracts with 120 shopping centers around the country, according to Globes on Thursday.

The IAA investigated the pharmacy chain’s legal right to prevent competing stores from opening in those malls following a complaint from Maccabi Health Services a year ago that it was being blocked by SuperPharm from opening a pharmacy in a shopping center next to its health clinic.

The IAA came to the conclusion that SuperPharm was in violation of the Restrictive Trade Practices Law. Sources told Globes that as the authority’s director general Michal Halperin was about to order imposition of monetary sanctions on the company for monopolistic practices, SuperPharm notified her of its willingness to loosen its grip on the mall locations and make room for competition.

The exclusivity deals are leasing arangements that prevented the owners of a shopping mall or center from leasing stores to a business that competes with SuperPharm in the vicinity of one of its branches.

SuperPharm will now cancel the exclusivity arrangements at the aforementioned 120 branches within six months, and at an additional 40 branches within four years.

In the future, any SuperPharm exclusivity arrangements will be limited to three years after a branch is opened for both new and existing branches. Halperin agreed to make an exception for another 18 branches. She also agreed to limited three-year exclusivity for new branches in order to enable the chain to make back its investment on the new branches.

In response, SuperPharm issued a statement which, while accepting the IAA ruling, implied that it had been unfairly singled out, since other companies were being allowed to continue the same practice:

“We welcome the Antitrust Authority’s fair ruling on SuperPharm’s exclusivity in shopping malls. We are confident and expect that the Antitrust Authority will now apply equal rules to all exclusivity arrangements in Israel and to all chains in all sectors.”

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