Bagel boss caught on camera chewing over price-fixing deal

By Marcus Dysch, December 11, 2008

Britain’s two biggest bagel companies are at war after the boss of one was secretly filmed at a kosher restaurant allegedly suggesting a price-fixing arrangement.

Peter Maycock, of New York Bagel Company, was clandestinely filmed by Paul Kahalani at Met Su Yan in Golders Green as they discussed a possible buyout of Mr Kahalani’s firm, The Bagel Group. The companies supply almost all of the 200 million bagels sold in UK supermarkets annually, with New York Bagel accounting for 90 per cent of the market.

Negotiations over a buyout had been taking place since October but, suspicious of Mr Maycock’s motives, Mr Kahalani used a camera hidden in a Filofax to record last month’s meeting.

During the meal, Mr Maycock appeared to suggest the two companies should fix their prices when selling bagels to an Irish wholesaler.

On the video he can be heard to say: “What I wanted to say to you today was, I’ll tell you where our prices are and I suggest to you that you put up your prices, big time.

“The best thing you can do, Paul, is put your prices up. There’s no point in undercutting us... As far as I’m concerned we may as well be at the same price.”

Mr Kahalani has passed the 90-minute video to the Office of Fair Trading, asking it to investigate a breach of price-fixing regulations.
The move led New York Bagel’s parent company, Canada Bread, to launch its own investigation. Mr Maycock was suspended from his position as managing director on Sunday. Canada Bread president Richard Lan said: “While these allegations are unproven, they are serious, and we are taking all precautionary steps to fully investigate this matter.”

But he also accused Mr Kahalani of trying to “significantly raise the selling price” of his business late in the buyout process.

Mr Kahalani set up the firm with his brother, Avi, 20 years ago. Their East London factory is under Sephardi supervision.

In a statement, The Bagel Group said it was “content to wait for the OFT’s findings”. Mr Maycock was unavailable for comment.

Met Su Yan owner Daniel Urinov said: “I don’t know either of the gentlemen involved, but at least they have good taste in Chinese food.”

Last updated: 3:24pm, November 2 2010