By  on July 6, 2007

JERUSALEM — A class-action suit was filed in the Jerusalem District Court against New Cinema Ltd. and its owner, Amos Horowitz, claiming the importer of Crocs initiated and organized a cartel that fixed prices on Crocs in all the stores that sell the resin-based shoes.

A reported 1.2 million pairs of Crocs were sold last year in Israel, and the most popular style is the Beach model, the hole-ridden clog style that can be worn with or without socks. But unlike in the U.S., where the average Croc retails for $30, in Israeli consumers pay $17 more per pair, approximately $47 at current exchange rates.

According to the lawsuit, which was filed in May, New Cinema, the only importer of Crocs to Israel, forced stores to sell the shoes at set prices, warning the retailers that if they lowered the price, the importer would halt all supplies. Throughout Israel, Crocs can be found at $47 for the Beach model, $57 for the Highland model and $66 for the Off Road model. New Cinema sells them to retailers for around $24 a pair.

"It's chutzpah to tell someone at what price they have to sell something," said Sami Shmuel, the owner of Sport Future, a sporting goods store in Talpiot, a neighborhood in Jerusalem.

Shmuel has been selling Crocs for two years, since they were first imported into Israel. But he got fed up with the $47 price and stopped buying them from New Cinema. For the last three months, he has been purchasing his limited inventory from another store, and charging around $42 for his range of Beach model Crocs, a fact he broadcasts with a large $42 price sign at the top of the Crocs display at the entrance to the store. "I've definitely been selling more because of the price," Shmuel added.

Yet not every retailer is ready to cut ties with New Cinema. At an orthopedic shoe store in downtown Jerusalem offering a wide range of Crocs styles, including the Patra slide and Mary Janes, the Beach Crocs display stand has a sign for $46, but the shoes were being sold for $47, said the owner, who requested anonymity."I can't take the chance of New Cinema finding out that I'm selling Crocs for less," she said. "We were one of the first stores in Jerusalem to sell Crocs, and I count on them to bring in business to my store."

Horowitz would not comment on the charges of price-fixing leveled against him. Meanwhile, Israel's Antitrust Authority is talking to retailers and New Cinema in an attempt to figure out the market and the uniform pricing, according to an Antitrust spokesman.

"We're looking into whether this is price-fixing or if there is another justification for this conduct, such as retail price management," he said. "We haven't determined yet what we're dealing with here."

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