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SPEND A SUPER
SUMMER WITH US

$1 Million Price-Fixing
Fine To Manischewitz

The criminal case is over, but a
rabbinical court might seek reparations
for the Jewish community.

RON OSTROFF

Editorial Coordinator

T

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he B. Manischewitz
Co., which claims to be
the largest matzah
maker in the world, has been
fined $1 million after
pleading no contest to
charges it conspired to fix
the wholesale prices of
Passover matzah products.
In levying the fine — the
maximum allowed by law —
U.S. District Judge Harold
A. Ackerman of Newark,
N.J., said it was "warranted
as the just desserts for
Manischewitz conduct . . ."
The May 17 sentencing in
the criminal case comes
shortly after the company
agreed in principle to a
$2,575,000 settlement of
federal and California class
action lawsuits by con-
sumers alleged to have been
harmed by the price-fixing.
The proposed settlement
still requires approval of the
judge in each case.
In addition, late last mon-
th Conservative rabbis voted
overwhelmingly to summon
Manischewitz and com-
panies it is alleged to have
conspired with to appear
before a rabbinical court to
answer charges of price-
fixing and possibly pay
reparations to the Jewish
community."
Judge Ackerman said the
large fine was to punish
Manischewitz for the
"serious and evil offense" of
price-fixing and to a send a
message to the business
community that such "an
egregious assault on a free,
competitive society" would
not be tolerated.
Under strict legal defini-
tion, a no contest plea in a
criminal case is equivalent
to an admission of guilt in
that case only. The defen-
dant can still deny the same
alleged facts in any other
proceedings such as civil
lawsuits for damages.
Apparently for that
reason, on May 23, 1990,
before the civil cases had
been settled, Judge Acker-
man rejected the company's
application to plead no con-
test, saying it would not be
in the public interest. After
the civil settlements, he ac-
cepted that plea on April 26
of this year.

The proposed settlement of
the civil cases calls for
Manischewitz to provide
$575,000 in cash and $2
million in food to charitable
organizations approved by
the parties and the judges.
Attorneys have suggested
privately that the money
and provisions might be
directed to food banks in
cities with large Jewish
populations.
The indictment, brought in
March 1990, just weeks
before Passover, alleged that
between "sometime in 1981
and continuing at least
though April 1986,"
Manischewitz and unnamed
others conspired "to sup-
press competition by fixing
prices of kosher for Passover
matzah products in the
United States."
Although supermarkets
used Passover matzahs as a
loss leader to lure shoppers

The company's
argument of no
harm to the public
"borders in my
judgment on the
nonsensical."

Judge Harold A. Ackerman

into their stores, prices to
distributors saw large jumps
over the last 10 years.
Government lawyers had
argued that accepting a no
contest plea could signal to
other companies that price-
fixing is just a cost of doing
business. They added that in
the public's eyes such a plea
lacks the stigma of pleading
guilty.
After the no contest plea
was accepted, lawyers for
Manischewitz said the fine
should be lower than the
$160,000 pre-Nov. 1987
average for similar offenses.
They argued that the
public was not harmed, the
company's new owners
never approved the illegal
acts, the firm had already
made restitution through
the civil settlements, and
Manischewitz had suffered
enough from massive
publicity in the case.
Judge Ackerman said at
the sentencing that the new
owners "certainly knew