Caselaw

Civil Appeal 8709/23 The Central Beverage Distribution Company Ltd. v. The Commissioner Financial Case – Supreme Court of Competition - part 10

March 9, 2026
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Alongside the script, the company's employees were instructed that "you must first try to convince the customer of a criminal appeal of the sales process that you have learned.  We will also deal with any objections that may arise."

  1. The basis of the Tribunal's determination regarding the violations in this chapter was a number of factual determinations. Among them was the determination that the procedure was directed in a sweeping manner at parallel imports, that it was in continuous use of the company and that it established a message against parallel imports.  This last determination is significant for our case, and it is in turn based on the language of the procedure and the fact that it does not specify a mechanism for clarifying the legality of imports and canceling the sanctions, on the persuasion conversation that preceded the blocking and on the determination that the company's employees were instructed to implement it.

As to the aforesaid determination, given that there is no dispute that during the relevant period there was no legal parallel import, the company's approach to customers was made only in circumstances in which the customer held a parallel import that was illegal.  In addition, it should be noted that the procedure was not included in the agreements on a regular basis in a manner that was in front of all the customers.  The customers' encounter with the content of the procedure was only mediated by the company's employees, and only in cases where they were found to have a parallel import product that everyone agreed was illegal.  In these cases, the procedure taught us that the company's employees made it clear to the customer that he was in possession of products that were not manufactured by the company, and that they hold a legal opinion according to which the products in his possession are illegal and they are prohibited from selling him products of the same category until those illegal products are removed from the point of sale.  The combination of these things makes it difficult to accept the Tribunal's determination that the procedure conveyed a general message against parallel imports, whatever its nature.  On the contrary, the reasonable assumption is that most of the company's customers knew that the products in their possession were illegal.  In other cases, where the illegality of the produce was not visible on the surface, customers are still obligated to sell legal products (see, for example, the obligation to sell legally marked products: Section 17 30Consumer Protection Law, 5741-1981; Sections 3-3II 30The Deposit Law on Beverage Containers, 5759-1999; Public Health Ordinance (Food) [New Version], התשמ"III-1983), and when they are obligated as aforesaid, it is reasonable to assume that the customers acted to ascertain the quality of the produce they wish to sell.  It is therefore clear that the message conveyed to the customers must be examined in the appropriate context, whereas in our case it is reasonable to assume that the customers in possession of the Illegal parallel understood Because the illegality mentioned in the conversation with the company's representatives is limited to the illegality that did indeed characterize the produce, and not to the general practice of parallel imports wherever they may be.

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