Jerusalem District Court Judge Jonathan Adiel sentenced
lulav importers Avraham Balili and Jean Manshapoor to
three months of community service and a fine of NIS 30,000
($6,500) each after being convicted of taking part in a
lulav cartel seven years ago, a scandal first exposed
in Yated Ne'eman.
The importers faced charges of forming a cartel before Succos
5759 (1999) by coordinating lulav marketing and sales.
The main charge against them was price fixing.
The court determined that the cartel's lulav prices
were significantly higher than in the previous year and
higher than the price at the beginning of the lulav
season. In its ruling the court noted that the increase in
lulav prices was not coincidental, but stemmed from a
deliberate, calculated decision by the cartel members.
The affair began when MK Rabbi Avrohom Ravitz filed a
complaint with the Antitrust Authority regarding the cartel
among El-Arish lulav importers, which had led to a sharp
price increase in 5759. The Authority's investigations
department found that the importers had fixed prices by
storing all of the lulovim arriving from El-Arish in a
single warehouse and then controlling distribution to
dealers. Following the investigation, the Antitrust
Authority's legal department decided to file an indictment.
Three months ago the court found the defendants guilty of
forming a binding arrangement.
The Judge said that the horizontal nature of the price-
fixing cartel justified harsh punishment. On the other hand,
the judge listed several extenuating circumstances such as
legal advice the defendants had received that misled them to
think the partnership agreement was permissible (according to
Globes, the Attorney General had approved the
partnership agreement), the small size of the market, the
short time period and the defendants' financial
difficulties.
"As other considerations warrant a lenient ruling I will take
into account the defendants' advanced age and difficult
financial situation," writes the judge, noting that the State
demanded Balili receive a harsher sentence since he played a
more dominant role in carrying out the violation, but, "I was
not convinced that a distinction should be made between the
defendants in sentencing," writes Judge Adiel. He also took
into account the fact that the legal proceedings against the
other defendants have been delayed or the charges dropped.
After laying forth the extenuating circumstances the court
sentenced the two defendants to three months of community
service, a fine of NIS 30,000 each and a suspended prison
sentence of 12 months if they violate antitrust laws within a
period of three years from the day of sentencing.
The Antitrust Authority was pleased with the sentence,
saying, "The ruling sets a minimal punishment for cartel
violations since the size of the lulav market is
limited and the cartel was for a limited time based on the
fact the market lasts only a few days. Therefore clearly the
court is moving toward stricter minimal penalties for
cartels."
Nevertheless lulav dealers claim the punishment was a
just a tap on the wrist since these penalties will not deter
importers from forming another cartel.
This year dealers faced the worst lulav shortage in
years. Shortly before Succos, Balili was again accused of
creating a shortage of lulovim in an attempt to
control the market. An investigative report published in
Yated Ne'eman uncovered the techniques he used to
create an artificially small supply to jack up prices. Only
through the efforts of a number of chareidi dealers
and the help of chareidi MKs were tens of thousands of
lulovim brought into the country at the last moment
through alternative routes, bringing down prices. In the US,
however, there was a serious shortage of lulovim this
year.
