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Price of Matzo Fixed, N.J. Indictment Claims

March 21, 1990|MARIA L. La GANGA | TIMES STAFF WRITER

The B. Manischewitz Co., one of the nation's leading kosher food manufacturers, was indicted by a federal grand jury for conspiring to fix wholesale prices in the U.S. matzo market, Department of Justice officials said Tuesday.

The one-count indictment alleges that Manischewitz and a group of unnamed co-conspirators illegally agreed to increase the price of "Kosher for Passover" matzo products for at least five years.

Manischewitz officials denied the charge and said in a written statement Tuesday that the company will "vigorously defend" itself.

A Newark grand jury charged in the indictment, which was filed Monday, that the matzo maker conspired to fix prices from 1981 through at least April, 1986. The Jersey City, N.J., firm and other kosher food companies have been under investigation for more than two years. The investigation is continuing, said Joe Krovisky, a Department of Justice spokesman.

"During the period of time covered by this indictment, the defendant and co-conspirators were the major manufacturers of Kosher for Passover matzo products in the United States," the indictment said. "Their customers were primarily distributors of kosher food products who sold to supermarket chains and independent grocery stores."

According to the indictment, Manischewitz and its co-conspirators sold roughly $25 million worth of special matzo--a flat, unleavened bread--during the course of the alleged Passover plot.

What makes Passover matzo different from all others is that, during preparation, Jewish employees carefully remove a small piece of dough from each batch to be burned as a symbol of offerings made at temples in ancient times.

Manischewitz was founded in 1888 in Cincinnati, then a center of Jewish culture, by Rabbi Dov Behr Manischewitz. Matzo was the company's first--and for many years only--product. Today it accounts for half of the company's annual sales of about $30 million. The company also makes a full line of kosher foods for Passover and daily use.

The grand jury charged in the indictment that Manischewitz and its cohorts conspired to fix prices in the following fashion: The companies discussed the amounts by which matzo prices would be increased; they agreed to increase matzo prices; the prices they charged their customers reflected the hikes agreed upon earlier.

"Manischewitz denies the charges and maintains that its prices have been independently and fairly determined and have never been set pursuant to any agreement with any competitor," company officials said in a written statement.

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