Food law will come into force in January 2015. Later this year retailers started to show full price transparency. So how was born the law, who it will affect and what the regulations stipulate?
As part of government efforts to promote food law signed earlier this month, regulations requiring major retailers advertising the prices of all their products online. In addition to publishing prices which will take effect in six months, regulations require 19 large chains to keep the prices listed on their Web sites up to date all the time.
So what we got here?
Regulations signed in -3.11.14 determine the retailer to publish on his website the following files: a file that lists the network of stores, product dedicated file and another file that will detail the operations in every store. These files will be built according to a special format determined by the Ministries of Economy and Finance, and include, among others, timestamp specifying the date and time when the file was sent, in order to ensure that current prices are updated. A document issued by the Ministry of Economy determined that, that in case of opening day for a branch of a large retailer, the retailer will publish a large file, commodities prices and deals complete file, no later than the opening day of the store.Also, if the prices will be updated at the box office during the day, major retailers will be required to update their prices on their websites in a period of one hour. Regulations place emphasis on the file available to consumers and determined that format of file should be XML, Excel , Zip or Pdf. In addition, there was a reference to the level of availability of the site to consumers: 99.5%. These regulations are only one element from food law, which aims to increase competition in the industry and reduce consumer prices.
How the law born?
In an attempt to lower food prices, against a backdrop of social protest, the government appointed in June 2011, a team to examine the level of competitiveness in the market. The team found that the test ‘Marketplace’, food and consumer products controlled by a small number of suppliers with market shares is great. The position of the dominant factors in the various sectors and reducing of competition at the level of suppliers or retailers is because supply sector section is connected with various arrangements and practices of marketing that should not be strengthen. Impairment of competition in these markets leads directly to raise consumer prices and a variety of injury for stands. In light of the test results determined by team recommended this new law and rules for the behavior of these ‘markets’ – and like this was born the Food Act.
Limitation of shelf space allocation for large suppliers.
Ministry of Economy published a draft guidelines for area that can be rack rate, whereby a large “supermarket shall not be entitled to assign in his shop more the 50% to big groceries. The goal is to open the shelves for small producers also and the big ones to have monopol on the market. The area allocated for the largest supplier could be mark special with signs up in order to make the diffrence betwen them and small producers and should be made in accordance with the guidelines retail.
The geographic restriction on competition. In a press release issued by the Antitrust Authority in early September 2014 stated that a large network which will seek to open new branch will be required to apply the Anti. Moreover, if the antitrust commissioner finds that a certain retail and his branches take over the market, the commissioner may apply to the Antitrust Tribunal and demand that retail stores would sell the disposal, in order to dilute his geographical presence. The model it is based on characterization of geographic competitiveness: Settings per store, setting up the per store and per definition retail demand on each region.
Limitation of intervention for largest suppliers on consumer prices. Food law prohibits the largest suppliers to influence consumer prices. However, the draft published by the Antitrust Commissioner, the ban eased that the largest suppliers to intervene in consumer prices – if it would lead to lower prices. Such as specifying a minimum price to the consumer are prohibited.
The law, which went into the agreement between the major suppliers to major retailers, prohibits suppliers to conditioning the sale of a product in demand of buying goods less popular and offer a discount to retailers in exchange for a promise to bringing about a competitor’s product from the network.
Who is being targeted?
In August, the Antitrust Authority published the list of major suppliers , a list of very major suppliers and retailers where the law limits apply. Are the largest suppliers where their sales turnover in the country is more than 200 million year without VAT.
Is a very large supplier who sold to retailers in an amount exceeding one billion in the previous fiscal year. These suppliers lists can be found listed. Food chains that appear on the list of the Antitrust Commissioner have sales turnover of 250 million a year or more, and have more than three branches and include, among others: Mega, Super-Sol, Rami Levi, Tiv Taam, Eden Teva Market, Dor Alon, Victory.
What next?
All food law rules will go into effect on January 15, 2015. The obligation to update the prices on the websites shall enter into force, as mentioned, only in about 6 months. Meanwhile, battles are fought between retailers and major suppliers and members and the Antitrust Commissioner in an attempt to ease the restrictions of the law.
