Coca-Cola Fined NIS 39M Over Monopolistic Practices

Boxed Coca-Cola bottles lined up at the Coca-Cola factory in Bnei Brak. (Yaakov Naumi/Flash90)

Coca-Cola abused its position as a monopoly in Israel – and it is costing the company NIS 39 million ($11 million) in fines, which were issued Tuesday by the Israel Anti-Trust Authority. The fine was issued in response to a recent lawsuit contending that the company had essentially killed off its competition through its business practices.

Anti-Trust Authority head Michal Halpern said that the The Central Bottling Company of Israel, distributors of Coca-Cola, “had violated clear instructions about how to behave as a monopoly when it absorbed the Neviot water company.” According to the Authority, Coca-Cola Israel used its domination of the cola market to force retailers to give more prominent shelf space to other beverages it was selling, and to ban outright competing brands. The company had specifically agreed not to do so when the Anti-Trust Authority approved its acquisition of Neviot. The company was also guilty of other monopolistic practices, the Authority said.

Earlier this year, a class-action lawsuit against the company’s monopolistic practices was approved for adjudication by the Central District Civil Court. The lawsuit contends that Coca-Cola has cornered the market on 1.5-liter bottles of cola soft drinks in Israel. According to evidence presented by the plaintiffs, Coca-Cola has for many years held some 90% of the cola market in Israel. In addition, research shows that the price of the product has consistently been between 45% and 50% higher than competing brands – and that when prices of other colas rise, the price of Coke does as well.

Responding to Tuesday’s fine, the Central Bottling Company said that “this is the third time the Authority has decided against the company based on the same complaints. In each case the Authority reversed its decision, and in each case the fine charged was lowered. We are positive that the same result will occur after we make our case, and that the fine will be dropped completely.”