“So we lost another year, we’re used to losing”

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Yaron Angel, owners of Angel BakeryYaron Angel, owners of Angel Bakery

Yaron Angel, owners of Angel Bakery

(Photo: Alex Kolomoisky)

Yaron Angel is the owner, CEO and third generation of the mythical Angel Bakeries chain in Jerusalem, one of the largest bakeries in Israel, which has existed since 1927 and employs about 1,200 workers. Yaron’s grandfather, Solomon, founded it, and was later run by his father, Danny. Angel currently has four bread bakeries – in Jerusalem, Lod, Netivot and Kfar HaHoresh – and another bakery in New Jersey, which manufactures for the American market, and operates 19 stores throughout Israel.

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In 2018, Yaron Angel ran two months in prison, after being accused along with managers at the Berman and Davidovich bakeries of coordinating the prices of supervised breads and challahs. He received the sentence as part of a plea deal, at the end of about eight years of antitrust investigation and trial, in what was called “The bread cartel affair“.

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Info Economy Yaron AngelEconomics Yaron Angel

The corona year was difficult. Where did you find your refuge this year?
Angel: “I drowned myself in work, I think it kept me sane, from the fact that we worked almost full time as an essential enterprise. My escape was into the doing, the work and the ongoing challenges that occupied me: sick workers, isolation workers, worker care, their health security. Overseas travel, conferences and meetings were avoided, so I found myself busy most of the time inside the factory.

“In terms of financial results the corona hurt us, because we lost the sales of the institutional market, but unlike others I was not traumatized by the event, because for me nothing extraordinary happened. Years of Angel Bakery lose, because the state is not willing to update the price of controlled bread and we produce “He lost, so we lost another year. We are used to losing.”

“The strongest feeling was not the denial of freedom, but mainly the insult from the very fact that they sent me to prison. I addressed the matter of imprisonment in a technical way: that’s what it is.”

As someone who had previously sat in jail and been deprived of liberty, what was the feeling?
“For me the strongest feeling was not the deprivation of liberty, but mainly the insult from the very fact that they sent me to jail and thought it brought some benefit. I addressed the issue of imprisonment technically: that’s what it is. It also has to do with mental resilience. It’s easy to know that you have already reached the final section, the prison, and after that it is all over. “

When you search for your name on Google, it turns out: Yaron Angel has repented. Was that your refuge in prison?
“I did not repent, the old man is just misleading. In prison if you are over a certain age, or a prisoner for a short period of imprisonment, you are not sent to work, but to a seminary next to the synagogue in prison. The rabbi teaches three hours of Torah and Rashi every day. There were complete heretics with me who fought with him that there is no God. Although I did not repent, we always had a respect for tradition. My grandfather was a religious Sabbath-keeper. I did not go through a mental process in prison, perhaps because I was short on time. The knowledge that this was a short prison sentence was part of the relative ease with which I went through the period. “

“Most people in Hermon Prison get jailed, and some get fined. I met people who sat because they did not pay the fine. They said, ‘Every month I earn the amount of the fine.’ To save the fine they found it not so bad to give up freedom for a while. ”

What is the conclusion after prison, regarding freedom and in general?
“I took the prison term relatively easily because I believed in my innocence. What has changed in me is that today I look more cynically at the justice system. True, there is no air conditioning in prison, and the food is nothing, but for me it was like staying Saturday in the army. Chooses ordinary life, but IPS is just a fair system and I have no complaints about them, they face a difficult task.

“But I found out that for those who did a good blow the imprisonment is not terrible. There are people for whom the price of relinquishing their liberty is equal: most people in Hermon prison get imprisoned, and some also get a fine or just a fine. I met people who sat because they did not pay the fine by choice. : Every month of sitting I earn the amount of the fine.That is, in order to save a payment of a respectable amount they found that it is not so terrible to give up liberty for a certain period of time.

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Yaron Angel, owners of Angel BakeryYaron Angel, owners of Angel Bakery

Angel. “After eight years of torture, it was a relief to know you had reached the final section, the prison, and after that it was all over.”

(Photo: Alex Kolomoisky)

“I was not fined. The other defendants in the bread cartel received three months in prison and three months of community service. I, unlike them, insisted on fighting until the end of the legal proceedings. My sentence was five months, and as part of the pardon for the country’s 70th year I was shortened to three. Months, and I dropped a third for good behavior.I actually sat for 60 days.

“It was not a positive experience for the family, but people saw me fighting for my innocence and realized that something had gone wrong here that should not have happened. My son thinks I am an idiot. He tells me, for whom are you working? For those who send you to jail? Close the factory and see them. My little daughter, Yael, appeared in court for sentencing. The judge cried. She told what it was like to grow up in the shadow of the trial. The investigation began when she was ten and ended when she was 18. On the day they arrested us, she was in fourth grade. ‘And she said on her own initiative to the students:’ Today my father was arrested, but there is no story. I know he did nothing. ‘

“Shaike Davidovich (owner and CEO of Davidovich Bakery, who was also prosecuted and received a prison sentence) has already died. In my opinion, he did not recover from the case. I am glad that my father died before the affair.”

Why did Angel get used to losing years?
“The Israeli government has decided to eliminate the industrial bread industry, and is using every means it can to avoid updating the price of regulated bread to the fair price at which it should be sold. If to this day people use the term subsidized bread, years after the Treasury stopped subsidizing, then the subsidized bread It’s just the bakeries that subsidize it. It’s not just Angel’s problem. My late uncle said that when it’s raining in Angel, it’s raining in Bremen as well.

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Angel Bakery in LodAngel Bakery in Lod

Angel Bakery in Lod

(Photo: Chen Loveton)

“Our trial was not about what the investigation was opened for: suspicion that the bakeries matched a price in Ministry of Defense tenders. They found no evidence of that. But when they start investigating, they find something. We were tried on a point incident, we tried to prevent a Davidovich bakery operation selling four loaves in. I spent two months in Hermon Prison, which is insulting, because we are probably the only cartel in history that agreed between its members to sell at a loss – not four loaves for NIS 10 but three loaves for NIS 12, when according to the bread price control order the price should have been NIS 18 For three loaves.

“Our whole move was to stop loss-making prices. People are making a cartel to make a cartelistic profit. We are probably the only idiots who made a loss-making cartel. We and the other big bakeries filed before the High Court case against the state for not updating bread prices. For more than seven years the state has not conducted a normal inspection of bread costs under supervision. The difference between the real price and the regulated price is only one shekel – that is what it takes to move us to profit, or at least not to lose. “

It was argued at the time that in exchange for the price of supervised bread not being updated, the government allows you to sell specialty breads at a high price. This week the Competition Authority in general claimed that the price of controlled bread is high and should be reduced.
“This annoys me the most. What do you mean allow us? Anyone can sell as much as they want. Why should bread at all be supervised? In milk it can also be said that for the supervision the dairymen received from the government a guaranteed target price for a liter of raw milk. We got nothing.

“The only reason they don’t update the price of bread is that no ‘eggs’ politician has to do it. It’s populism for its own sake. We have been fighting for years against the government, unfortunately without success. We have built whole factories for bread production and we do not want to close, but there may be no choice. Will come. I will continue to produce until I get tired. Here, the oil company has stopped producing. But when we stop, a loaf of bread will double. I tell you that the only way the price of bread will remain reasonable is only if large industrial bakeries, whose production costs are low compared to small bakeries. No small bakery can produce a regular challah for five shekels.

“When you tell officials that the bakery will collapse, they say: Angel is like a bank, you will not stop. The judge also said: If you lose, why do you continue to produce? I said: I am a public company (traded on the stock exchange – NZ) that publishes two” Hut, so you’re implying that I’m falsifying reports and losses? The plaintiff told me: I think you are earning. What do you think it is? I told him, “Then come and run Angel.”

How can you lose over the years and keep going?
“Luckily we do not lose much, so we can pull the situation. In a bad year we lose 2% of turnover. In a good year we gain 2%. We eat our equity. That’s why in the last ten years the bakeries have not invested in equipment and refinement.

“We have now published financial reports for 2020, with a loss of four million shekels. We are able to lose because our cash flow is positive. The supervised products make up 30% of the turnover. The difference between the price of bread at the factory entrance and the price in consumer chains should be 12%, but the chains are not satisfied with that and force you to give them a discount. The government does not recognize this assumption and is not willing to take it into account when calculating the controlled price to the consumer.

“Our hope is that one day there will be an economy or finance minister who will not be afraid to raise the price of bread. Arik Sharon and Ehud Olmert were not afraid and raised, all other rags. Luckily, I am happy that I produce great products that people like and compliment us. That is what makes me fun. “.

The plot of land in Jerusalem on which the bakery operates is worth a fortune. Will you earn more real estate ventures on it or from its sale than from operating the plant?
“We own 18 dunams in Givat Shaul, worth ‘every winning number.’ There are no such plots in Jerusalem in terms of size. It is already allowed to build a commercial and offices there. I am 61 years old and will continue in the factory until I die. Ask my father when he was 85 why he comes every day To the bakery. He said: It’s half way to Givat Shaul (the cemetery). Every morning when I go to the bakery I see Dad, Grandpa and Great-Grandpa, everyone. I can stop producing and enjoy the real estate profits, but it does not matter to me, it does not A substitute for doing. I love doing it. “