Carmit Candy had pursued fellow-Israeli firm Strauss for damages after it alleged Strauss had blocked Cadbury’s entry into Israel in contravention of anti-trust laws.
Strauss has agreed to pay Carmit ($2.5m) to end the lawsuit and will purchase NIS 50m ($14m) of products from Carmit over the next four to ten years.
Best for both
“The president of Strauss and chairman of Carmit both agreed that realizing this issue outside of court and continuing our joint business cooperation is better for all parties,” Gil Messing, director of external communications and government relations at Strauss, told ConfectioneryNews.
He said that the $14m trade deal continued existing agreements between Strauss and Carmit that had lasted for 30 years.
Under the settlement, Carmit Candy was unable to comment on the case, but it said in a stock exchange filing that it was pleased to reach an agreement.
Cadbury’s UK owners attempted to enter the Israeli market through Carmit in 2002, but the brand failed to take off. Carmit alleged in its lawsuit that Strauss had blocked Cadbury’s entry by threatening to rescind discounts offered to retailers if they stocked Cadbury products.
In 2006, Israel’s Antitrust Authority fined Strauss subsidiary Elite NIS 5m ($1.1m) following an investigation. It was agreed that no criminal charges would proceed, but it said Carmit were entitled to claim for civil damages, which could have seen Carmit awarded up to NIS 36m ($10m) had it won the case.
Consumer group Emun Hatzibur (Public Trust) filed a complaint in 2012 with Israel antitrust authority alleging that Strauss had exploited its market power to artificially raise the price of chocolate in Israel to around a third more than global norms – a claim Strauss denies.