Israel Competition Authority Exposes Food Market Monopoly Practices
A comprehensive mapping by the Israel Competition Authority reveals how major food suppliers like Tnuva and Coca-Cola exploit market dominance through illegal tying practices to keep prices high.
Market Concentration and the "Basket Effect"
Just before the elections, and alongside declarations by prime ministerial candidates to dismantle food market monopolies to lower the cost of living, the Israel Competition Authority has mapped out the concentration of power enabling high prices in Israel compared to global standards.
Based on 2025 StoreNext data, the authority's analysis reveals that conditions among Israel's largest food suppliers create strong incentives for the "basket effect." This practice allows suppliers to leverage market power from a category where they dominate into other categories through tying arrangements.
In practice, this translates into prohibited commercial conduct between suppliers and retailers, where a major supplier conditions the sale of a highly demanded product on the purchase of another, usually less popular, item.
Six Giants Controlling the Shelves
The mapping shows that each of the six largest companies in the sector acts as the primary supplier across numerous categories:
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Tnuva (the market leader) and Strauss (the second-largest food company) each lead in 12 out of 20 examined categories.
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Osem (the third-largest) and Unilever Israel each lead in 13 out of 20 examined categories.
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The Central Bottling Company (Coca-Cola Israel) is the largest supplier in 5 categories, with Coca-Cola and Fuze Tea accounting for over 90% of its sales.
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Sano leads sales in 8 categories within the cleaning and toiletry sector.
Other significant players analyzed include the meat and poultry company Neto (controlled by Adi Ezra and David Mezessa), leading in 5 categories; importer Diplomat (controlled by the Wyman and Mendel families), leading in 9 categories; Tempo (owned by Jacques Beer and Heineken), with 6 categories; and paper products manufacturer Kimberly-Clark, leading in 4 categories.
Price Control as an Incentive for Exploitation
The authority presented economic theories on leveraging market power, noting that price controls on basic goods can backfire. For companies like Tnuva, price controls on essential dairy products (such as fluid milk, weighed yellow cheese, white cheese, and sour cream) limit profit potential.
This restriction creates an incentive for regulated firms to employ practices that leverage power from price-controlled markets into unregulated ones to compensate for lost profits.
Coca-Cola as a "Must-Have" Leverage
The Central Bottling Company serves as a prime example of leveraging "must-have" products. As the exclusive distributor of Coca-Cola in Israel, its products are essential for retailers to remain competitive and prevent customers from migrating to other chains.
According to economic theory, a supplier of a must-have product can link it to other goods, forcing retailers to pay higher prices than competitors charge for alternative products. The Central Bottling Company, through its subsidiary Tara Dairy, also operates in regulated dairy categories, further incentivizing the leverage of market power across product lines.
Despite documenting extreme concentration and clear incentives for anti-competitive behavior, the Competition Authority chose to leave policy conclusions to the next government, limiting its report to presenting potential positive and negative impacts.
