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Law for the Promotion of Competition in the Food and Pharmacy Sectors, 5774-2014

חוק קידום התחרות בענפי המזון והפארם, תשע"ד-2014

Published: 2014-03-27Consolidated Hebrew text as of 2026-07-19 · Last amended 2025-12-30✓ Amendment status checked against the Knesset legislation record on 2026-09-17
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Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More

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Section B: Geographical Competition of Retailers

Definitions§
14.

In this Section –

"demand zone", of a large store of a large retailer – the zone defined for it by the Commissioner pursuant to section 15(a);

"statistical zones" – the census zones and sub-zones determined by Order pursuant to section 6 of the Statistics Ordinance [New Version], 5732-1972;

"application" – an application for the opening of a large store, submitted pursuant to section 17(b);

"the calculated rate", of a large store of a large retailer – the rate calculated for it by the Commissioner pursuant to section 16(a);

"competition group", of a large store of a large retailer – the group of stores defined by the Commissioner in respect of that large store pursuant to section 15(b);

"large retailer" – any of the following:

(1)a large retailer as defined in section 2;
(2)a retailer holding at least one large store whose sales turnover, in the preceding financial year, exceeded NIS 100 million, and any related person to him; for this purpose, "sales turnover" – including the sales turnover of commodities that a supplier sold in the large store of such a retailer.
Definition of Demand Area and Competition Group for a Large Store of a Large Retailer§
15.
(a)The Commissioner shall define, for each large store of a large retailer, the geographical area, based on the statistical area in which the store is located and on statistical areas surrounding that area, which shall be considered the demand area of that store for the purposes of this Section; for this purpose the Commissioner shall take into account, inter alia, the following considerations:
(1)travel distances of consumers to the store;
(2)the size of the store;
(3)the location of the store in an urban or other environment.
(b)The Commissioner shall define, for each large store of a large retailer, the group of stores of large retailers in which there is an overlap between the population in their demand areas and the population in the demand area of the large store at a rate exceeding the determining rate, which shall be considered the competition group of that large store for the purposes of this Section; for this purpose, "the determining rate" means the rate decided upon by the Commissioner and published on the website.
The Calculated Rate for a Large Store of a Large Retailer§
16.
(a)The Commissioner shall calculate, for each large store of a large retailer, the rate obtained from the ratio between the sales turnover of the large retailer in its large stores in the competition group of the store being examined, including that store itself, and the sales turnover of all large stores belonging to the competition group; in this section, "sales turnover" means the sales turnover of a large store in the portion attributed solely to the demand area of that store, including from the sale of goods of a large supplier through the large retailer in that store.
(b)The Commissioner shall notify each large retailer, at least once every two years, in writing of the demand areas of its large stores whose calculated rate exceeds 30% and of the demand areas of its large stores whose calculated rate exceeds 50% (in this Chapter — notice of demand areas).
(c)A large retailer that has received a notice of demand areas may lodge an objection thereto before the Commissioner; such an objection may be submitted within the two years following receipt of the notice, including on account of a change of circumstances.
(d)If the Commissioner finds that the large retailer has established a reasonable factual basis for its objection, the Commissioner shall examine the objection and shall notify the retailer of the decision.
Opening an Additional Store in a Demand Area§
17.
(a)A large retailer shall not open an additional large store in a demand area included in a notice of demand areas, except with the prior written approval of the Commissioner and in accordance with the conditions of the approval.
(b)A large retailer wishing to open an additional large store in a demand area included in a notice of demand areas shall submit a reasoned application to the Commissioner (in this Section — application).
(b1)(Lapsed)
(b2)(Lapsed)
(c)The Commissioner shall not approve an application in respect of a demand area in which the calculated rate as stated in the notice of demand areas exceeds 30% but is below 50%, unless the Commissioner finds that there is no reasonable concern that the opening of the store will cause harm to competition.
(d)The Commissioner shall not approve an application in respect of a demand area in which the calculated rate as stated in the notice of demand areas exceeds 50%, unless the Commissioner finds that there is a near-certainty that the opening of the store will not cause harm to competition.
(e)The Commissioner shall give a decision regarding approval of the application, with or without conditions, or regarding the objection to the application, within 90 days of the date of submission of the application; in counting the said days, no account shall be taken of time elapsed from the date on which the Commissioner requested additional particulars required for examining the application until their receipt.
(f)The Commissioner's decisions on applications under this section shall be published on the website.
Appeal against the Commissioner's Decision on an Application to Open a Large Store§
18.
(a)If the Commissioner objects to an application, or makes approval conditional on conditions, the applicant may appeal the Commissioner's decision before the Tribunal within thirty days of the date of its receipt.
(b)If the Commissioner approves an application, whether with or without conditions, a person liable to be harmed by the Commissioner's decision, a trade association, and also a consumer organisation, may appeal the decision before the Tribunal within thirty days of the date on which the decision was published on the website, provided that the decision is liable to cause that person, the members of the association or consumers harm contrary to the purposes of this Law.
(c)The Tribunal may affirm the Commissioner's decision, annul it or vary it.
(d)The provisions of sections 33 to 40 of the Economic Competition Law shall apply, with the necessary modifications, to the Tribunal's proceedings on an appeal under this section and to an appeal against its decision.
19.§

(Repealed)

Prohibition of an Arrangement concerning Real Property§
20.

A large retailer that has received from the Commissioner a notice of demand areas shall not enter into an arrangement whose subject, purpose or result is the restriction of other retailers from entering into a contract for a transaction in real property or concerning real property, including the purchase, sale, long-term lease or lease of real property, or for the establishment of a large store or for any competing activity in the food sector, in the demand area of the store to which that competition group relates, and shall not extend such an arrangement.

Reporting Duty of a Large Retailer on Large Stores and Pharmacy Stores§
21.

A large retailer shall report to the Commissioner, once a year, on the large stores it holds and on pharmacy stores as defined in section 21a that it holds, their location, the sales area in each of them, the date on which each store commenced operations and the annual sales turnover of each store; the Minister shall prescribe provisions regarding the particulars of the report and the dates for its submission.

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Section B-1: Application of Chapter II to the Pharmacy Sector

Definitions – Section B-1§
21a.

In this Section –

"pharmacy store" – a place for the retail sale of preparations, cosmetics and consumer products, including an online store, provided that all of the conditions set out below are met in respect thereof, and for this purpose several points of sale shall be regarded as one pharmacy store if one retailer holds them in one complex:

(1)all of the following are sold therein on a regular basis: cosmetic products and cosmetics, toiletry products, cleaning products and hygiene products;
(2)more than one quarter of the turnover of sales therein is from the sale of all of those listed in paragraph (1);

"pharmacy product" – a product sold in a pharmacy store, excluding perfumes, make-up and face and neck care products, electrical products, textile products, office equipment, household utensils, books and newspapers, preparations and optical products;

"pharmacy retailer" – a person who holds a pharmacy store and also any person associated with that person;

"large pharmacy retailer" – a pharmacy retailer whose total sales turnover in that retailer's pharmacy stores, in the previous financial year, exceeds NIS 461,899,261.99 and who holds at least 12 pharmacy stores.

Application of the Provisions of Section A to the Pharmacy Sector§
21b.
(a)The provisions of Section A shall apply, with the necessary modifications, also to a pharmacy store, to a pharmacy product, to a large pharmacy retailer and to a large supplier when entering into an engagement with such a retailer.
(b)The Minister, in consultation with the Commissioner and with the approval of the Economics Committee of the Knesset, may, by Order, amend the rate of sales turnover referred to in paragraph (2) of the definition of "pharmacy store" and the sales turnover referred to in the definition of "large pharmacy retailer".
Opening an Additional Pharmacy Store in a Shopping Centre by a Large Pharmacy Retailer§
21c.
(a)In this section –

"contract" means a contract whose purpose or result is a transaction in real property for the purpose of establishing the pharmacy store, including the purchase, sale, long-term lease or lease of the real property;

"shopping centre" means a bounded place used for commerce whose total commercial area exceeds 3,000 square metres, including a mall;

"large local authority" means a local authority whose number of residents registered in the Population Registry exceeds 200,000;

"small local authority" means a local authority that is not a large local authority.

(b)A large pharmacy retailer wishing to open a pharmacy store in a shopping centre in a local authority as set out below shall submit to the Commissioner an application to open a pharmacy store:
(1)in respect of a large local authority — if it has another pharmacy store within a distance of up to one kilometre from the shopping centre in which it wishes to open a pharmacy store;
(2)in respect of a small local authority — if it has another pharmacy store within a distance of up to two kilometres from the shopping centre in which it wishes to open a pharmacy store.
(b1)The Commissioner shall object to an application to open a pharmacy store as referred to in subsection (b), or make it conditional on conditions, if in the Commissioner's opinion there is a reasonable concern that the opening of the store will cause harm to competition.
(b2)The provisions of sections 17(e) and (f) and 18 shall apply, with the necessary modifications, to an application to open a pharmacy store under subsection (b).
(c)The provisions of subsection (b) shall not apply to a shopping centre whose total commercial area exceeds 35,000 square metres; however, if a pharmacy store of the same large pharmacy retailer wishing to open therein an additional pharmacy store is operating in such a shopping centre, the retailer shall be required to comply with the provisions of subsection (b).
(d)The provisions of this section shall not apply to the opening of a pharmacy store on real property in respect of which the contract was signed before the 8th of Adar II 5784 (18 March 2024).
(e)The Commissioner shall publish on the website a position paper for the implementation of the provisions of subsection (b), no later than the end of four and a half years from the date of commencement of the Law for the Promotion of Competition in the Food Sector (Amendment No. 8 and Temporary Provision), 5784-2024.
Prohibition of an Arrangement concerning Real Property – Large Pharmacy Retailer§
21d.

A large pharmacy retailer shall not enter into an arrangement whose subject, purpose or result is the restriction of other pharmacy retailers from entering into a contract for a transaction in real property or concerning real property, including the purchase, sale, long-term lease or lease of real property, or for the establishment of a pharmacy store or for any competing activity in the pharmacy sector, and shall not extend such an arrangement.

Reporting Duty of a Large Pharmacy Retailer on Pharmacy Stores§
21e.

A large pharmacy retailer shall report to the Commissioner, once a year, on the pharmacy stores it holds, their location, the sales area in each of them, the date on which each store commenced operations and the annual sales turnover of each store; the Minister shall prescribe provisions regarding the particulars of the report and the dates for its submission.

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Section C: Enforcement, Penalties and Financial Sanctions

Searches, Seizures, Investigations and Disclosure of Information§
22.

Persons authorised under sections 45 and 45a of the Economic Competition Law and vested with the powers under sections 45 and 46 of that Law shall be vested, for the purposes of the provisions of Chapter II, with the powers prescribed in the provisions of those sections, with the necessary modifications.

Penalties – Chapter II§
23.
(a)A person who does any of the following is liable to imprisonment of three years, or a fine of ten times the fine referred to in section 61(a)(4) of the Penal Law, 5737-1977 (hereafter — the Penal Law):
(1)a supplier who dictated or recommended to a retailer or a large pharmacy retailer included in the list, or otherwise intervened with a retailer or a large pharmacy retailer included in the list, in any of the matters referred to in section 5, contrary to the provisions of that section;
(2)a retailer or a large pharmacy retailer who dictated or recommended to a supplier, or otherwise intervened with a supplier, in any of the matters referred to in section 6, contrary to the provisions of that section;
(3)a large supplier who engaged in the arrangement of goods in a store of a large retailer included in the list or in the arrangement of pharmacy products in a pharmacy store of a large pharmacy retailer included in the list, or who dictated, recommended or otherwise intervened in the matter of the arrangement of goods or the arrangement of pharmacy products, as the case may be, contrary to the provisions of section 7(a)(1);
(4)a large retailer or a large pharmacy retailer who was party to an arrangement with a large supplier included in the list relating to the arrangement of goods in its store or to the arrangement of pharmacy products in its pharmacy store, as the case may be, contrary to the provisions of section 7(a)(2);
(5)a large supplier who dictated or recommended to a retailer or a large pharmacy retailer included in the list, or otherwise intervened with a retailer or a large pharmacy retailer included in the list, in any of the matters referred to in section 7(a)(3), contrary to the provisions of that section;
(6)a large retailer or a large pharmacy retailer who was party to an arrangement with a large supplier included in the list relating to the matters referred to in section 7(a)(3), contrary to the provisions of section 7(a)(4);
(7)a large retailer or a large pharmacy retailer who was party to an arrangement with a large supplier included in the list, or a large supplier who was party to an arrangement with a large retailer included in the list or a large pharmacy retailer included in the list or with a distributor, whose result is prohibited pricing, contrary to the provisions of section 8(a);
(8)a large supplier who conditioned the sale of one of its products to a retailer on the purchase of another product of that large supplier, or who conditioned the sale of a pharmacy product from its products to a large pharmacy retailer included in the list on the purchase of another pharmacy product of that large supplier, contrary to the provisions of section 8(c);
(8a)a large supplier who conditioned the granting of a discount, contrary to the provisions of section 8(a1);
(8b)a large retailer or a large pharmacy retailer who was party to an arrangement with a large supplier included in the list whose result is a prohibited discount, contrary to the provisions of section 8(b1);
(9)a supplier who transferred payments to a large retailer included in the list or to a large pharmacy retailer included in the list, contrary to the provisions of section 8(d);
(10)a large retailer or a large pharmacy retailer who received payments from a supplier, contrary to the provisions of section 8(d);
(10a)(Lapsed)
(11)a large retailer or a large pharmacy retailer who did not comply with instructions given to it by the Commissioner under the provisions of section 9;
(12)a large retailer who allocated shelf space at a rate exceeding 50% of shelf areas, or at another rate set by the Commissioner under section 10, to goods supplied to it by a very large supplier, contrary to the provisions of that section;
(13)a large retailer or a large pharmacy retailer who did not comply with instructions given to it by the Commissioner under the provisions of section 11;
(14)a large retailer who opened an additional large store in a demand area included in a notice of demand areas without receiving approval or otherwise than in accordance with the conditions of the approval, contrary to the provisions of section 17(a);
(15)a large retailer that received from the Commissioner a notice of demand areas and was party to an arrangement whose subject, purpose or result is the restriction of other retailers in the matters listed in section 20, contrary to the provisions of that section.
(16)a large pharmacy retailer who opened a pharmacy store without receiving approval or otherwise than in accordance with the conditions of the approval, contrary to the provisions of section 21c;
(17)a large pharmacy retailer who was party to an arrangement whose subject, purpose or result is the restriction of other pharmacy retailers in the matters listed in section 21d, contrary to the provisions of that section.
(b)If an offence referred to in subsection (a) is a continuing offence, the court may impose an additional fine of ten times the fine referred to in section 61(c) of the Penal Law (hereafter — additional fine) for each day on which the offence continues.
(c)If the offence was committed by a corporation, it is liable to double the fine prescribed in subsection (a) or the additional fine, as the case may be.
Penalties for Failure to Disclose Information§
24.

A person who did not provide information, a document, a register or another certificate, in accordance with a demand of the Commissioner or a demand of a person authorised by the Commissioner for that purpose, under section 46(b) of the Economic Competition Law by virtue of the provisions of section 22, is liable to imprisonment of one year or a fine of ten times the fine referred to in section 61(a)(3) of the Penal Law, and an additional fine for each day on which the offence continues; if that person is a corporation — double the fine or the additional fine, as the case may be.

Liability of Office Holders§
25.
(a)An office holder in a corporation is obliged to supervise and to do everything possible to prevent offences under section 23 by the corporation or by an employee thereof; if such an offence is committed by a corporation or by an employee thereof, it shall be presumed that an office holder in the corporation has breached the duty referred to in this section, unless the office holder proves that everything possible was done to fulfil that duty; in this section, "office holder" means a director, an active manager in a corporation, a partner, excluding a limited partner, or another person holding a position who is responsible on behalf of the corporation for the area in which the offence was committed.
(b)A person who breaches this provision is liable to six months' imprisonment or a fine of five times the fine referred to in section 61(a)(4) of the Penal Law.
Defence for Employees and Authorised Persons§
26.

It shall be a good defence for an employee or an authorised person charged with an offence under this Chapter if that person proves that they acted on behalf of their employer or on behalf of their principal and in accordance with their instructions, and that they believed in good faith that their act did not constitute an offence under this Law.

Financial Sanctions – Chapter II§
27.
(a)Where a supplier or retailer has contravened one of the provisions set out below, the Commissioner may impose upon it a financial sanction of up to NIS 1,182,850; where the contravener is a corporation and had, in the year preceding the financial year in which the contravention was committed, a sales turnover exceeding NIS 10,000,000, the Commissioner may impose upon it a financial sanction of up to 8% of the said sales turnover, provided that the amount of the financial sanction shall not exceed NIS 47,314,140:
(1)a supplier that dictated or recommended to a retailer or to a large pharmacy retailer included in the list, or otherwise intervened with a retailer or a large pharmacy retailer included in the list, in a matter referred to in section 5, contrary to the provisions of that section;
(2)a retailer or a large pharmacy retailer that dictated or recommended to a supplier or otherwise intervened with a supplier in a matter referred to in section 6, contrary to the provisions of that section;
(3)a large supplier that engaged in the arrangement of commodities in a store of a large retailer included in the list or in the arrangement of pharmacy commodities in a pharmacy store of a large pharmacy retailer included in the list, or that dictated, recommended or otherwise intervened in the matter of the arrangement of commodities or the arrangement of pharmacy commodities, as the case may be, contrary to the provisions of section 7(a)(1);
(4)a large retailer or a large pharmacy retailer that was party to an arrangement with a large supplier included in the list concerning the arrangement of commodities in its store or the arrangement of pharmacy commodities in its pharmacy store, as the case may be, contrary to the provisions of section 7(a)(2);
(5)a large supplier that dictated or recommended to a retailer or to a large pharmacy retailer included in the list, or otherwise intervened with a retailer or a large pharmacy retailer included in the list, in a matter referred to in section 7(a)(3), contrary to the provisions of that section;
(6)a large retailer or a large pharmacy retailer that was party to an arrangement with a large supplier included in the list concerning the matters referred to in section 7(a)(3), contrary to the provisions of section 7(a)(4);
(7)a large retailer or a large pharmacy retailer that was party to an arrangement with a large supplier included in the list, or a large supplier that was party to an arrangement with a large retailer included in the list or a large pharmacy retailer included in the list or with a distributor, the result of which is prohibited pricing, contrary to the provisions of section 8(a);
(8)a large supplier that made the sale of a commodity of its commodities to a retailer conditional upon the purchase of another commodity of that large supplier, or that made the sale of a pharmacy commodity of its commodities to a large pharmacy retailer included in the list conditional upon the purchase of another pharmacy commodity of that large supplier, contrary to the provisions of section 8(c);
(8a)a large supplier that made the granting of a discount conditional, contrary to the provisions of section 8a;
(8b)a large retailer or a large pharmacy retailer that was party to an arrangement with a large supplier included in the list, the result of which is a prohibited discount, contrary to the provisions of section 8b;
(9)a supplier that transferred payments to a large retailer included in the list or to a large pharmacy retailer included in the list, contrary to the provisions of section 8(d);
(10)a large retailer or a large pharmacy retailer that received payments from a supplier, contrary to the provisions of section 8(d);
(10a)(Expired)
(11)a large retailer or a large pharmacy retailer that did not comply with instructions given to it by the Commissioner pursuant to the provisions of section 9;
(12)a large retailer that allocated shelf space at a rate exceeding 50% of the shelf space, or at another rate set by the Commissioner pursuant to section 10, to commodities supplied to it by a very large supplier, contrary to the provisions of that section;
(13)a large retailer or a large pharmacy retailer that did not comply with instructions given to it by the Commissioner pursuant to the provisions of section 11;
(14)a large retailer that opened an additional large store in a demand zone included in the notice regarding demand zones without obtaining approval or not in accordance with the conditions of the approval, contrary to the provisions of section 17(a);
(15)a large retailer that received from the Commissioner a notice regarding demand zones and was party to an arrangement the subject, purpose or result of which is the restriction of other retailers in the matters listed in section 20, contrary to the provisions of that section;
(16)a large pharmacy retailer that opened a pharmacy store without obtaining approval or not in accordance with the conditions of the approval, contrary to the provisions of section 21c;
(17)a large pharmacy retailer that was party to an arrangement the subject, purpose or result of which is the restriction of other pharmacy retailers in the matters listed in section 21d, contrary to the provisions of that section.
(b)Where a person has contravened a requirement to furnish information, documents, ledgers or other records, given pursuant to section 46(b) of the Economic Competition Law by virtue of the provisions of section 22 of this Law, or the duty of reporting prescribed in section 12, 21 or 21e, the Commissioner may impose upon that person a financial sanction of up to NIS 354,860; where the contravener is a corporation and had, in the year preceding the financial year in which the contravention was committed, a sales turnover exceeding NIS 10,000,000, the Commissioner may impose upon it a financial sanction of up to 3% of the said sales turnover, provided that the amount of the financial sanction shall not exceed NIS 9,462,830.
Manner of Imposition of the Financial Sanction§
28.

The provisions of sections 50e to 50p of the Economic Competition Law shall apply, with the necessary modifications, to the imposition of a financial sanction pursuant to section 27.

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