Shufersal cancels deal to set up SPAR supermarkets in Israel

Spar

28/09/2023 09:31

By Steven Scheer
       JERUSALEM, Sept 28 (Reuters) - Israel's largest
supermarket chain Shufersal  SAE.TA  said on Thursday it had
cancelled a deal with SPAR to set up a network of the Dutch food
retail chain's stores in Israel, citing regulatory restrictions.
    Under the deal agreed last December and signed in March,
Shufersal would invest tens of millions of shekels to open at
least 10 SPAR branches over the next three years, while SPAR
products would be sold exclusively in other Shufersal-run
stores.
    Shufersal CEO Ori Waterman said that the deal would boost
competition during a period of rising inflation as it would
allow the Israeli group to import 10,000 discounted products,
but market conditions and regulations now made the deal
difficult.
    "Due to changing market conditions and regulatory demands,
and in accordance with the estimates we made during the period
from the signing of the agreement until receiving the
conditional approval from the competition authority recently,
the company decided not to complete the deal," Waterman said in
a statement on Thursday.
    It did not give details of the limitations imposed by the
competition regulator.
    "Shufersal knew about the conditions from the beginning and
was in dialogue with the authority," a spokeswoman for the
Competition Authority said.
    Shufersal was slated to own 19.9% of the new entity, with
businessman Amit Zeev  - who most recently was chief executive
of Shufersal's smaller rival Yeinot Bitan - holding 80.1%. 
    SPAR has 13,600 stores in 48 countries.
    For its part, Yeinot Bitan transformed some of its stores
this year into Carrefour  CARR.PA  stores under a franchise
agreement with the French retailer and many of its own branded
products are far less expensive than local alternatives.
    Waterman said Shufersal would continue to expand its own
private label brand as a way to combat the high cost of living.
    

 (Reporting by Steven Scheer; Editing by Susan Fenton)
 ((steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters
Messaging: Twitter: @StevenMScheer))