Strauss Group headed towards indictment. Following a prolonged investigation into the food price coordination affair, the Competition Authority announced yesterday (Monday) that it has summoned for a pre-indictment hearing Strauss Group, former CEO Giora BarDea, and CFO Ariel Shitrit on charges related to an alleged attempt to arrange a price-fixing collusion.
In 2021, Strauss noted in its first quarterly report of the year that due to the rising costs the company experienced, the possibility of price increases would be examined. The Competition Authority raised suspicions over the unusual remark in the report, viewing it as an 'experiment balloon' that the company released into the market in an attempt to signal to its competitors that the time had come to raise food prices. Concurrently with the report's publication, the company also released press statements about its consideration of price increases.
These public messages were conveyed even though there was no actual discussion within the company regarding a price increase, and despite the fact that according to Strauss' method, it was a minor and insignificant option in terms of its impact on Strauss in Israel compared to other business plans.
Strauss acted in this manner despite the concern within the company that these expressions might incur public criticism that would manifest in negative media coverage, potentially damaging the company's reputation and decreasing consumer demand for its products, especially considering that it was the first company in the food industry to address this issue. Strauss also acknowledged that raising its prices could lead to a negative public reaction and impact the company both in terms of public perception and competition.
According to the allegations, Strauss utilized the report, press releases, and other messages it published as an experimental balloon signaling to major food suppliers, especially its competitors, its intention to reach an arrangement for price increases. Therefore, Strauss is suspected of attempting to reach a covert arrangement for price hikes.
In response to the publications, Strauss commented: "Not every allegation adheres to the company's conduct and the duties of its executives, who acted as expected from them and under close legal guidance. We are confident that once the company and its executives present their positions, a reasoned decision regarding closing the case will be made."
