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Shawarma Index in Lapa: Why are prices in Israel only rising? - Walla! Of money

2022-07-19T09:40:55.246Z


The preoccupation with the price of bread has taken up much more volume in the public discourse than it should, but it is precisely through it that the distorted mechanism of the conduct of the food market in Israel can be characterized.


Shawarma Index in Lapa: Why are prices in Israel only rising?

The preoccupation with the price of bread has taken up a large volume in the public discourse much more than it should, but precisely through it it is possible to characterize the distorted mechanism of the conduct of the food market in Israel.

A seemingly free market, but concentrated in such a way that prices always change in one direction.

Hint: Absolutely not in our favor, consumers

Liat Ron

19/07/2022

Tuesday, 19 July, 2022, 11:43 Updated: 12:38

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Shawarma in Lapa, the Israeli equivalent of the "Bick-Mac Index".

68% jump in price (Photo: David Rosenthal)

With all the recent wave of price increases, large sections of the public seem to realize that sometimes there is no choice: global commodity crisis, transportation costs, currency exchange rates, rising commodity prices and more - concepts that were once only in the mouths of economists and have become commonplace in Israel.



So if everything is so clear, where's the problem?

Well - in the State of Israel, prices are moving in one direction, always up.


So maybe it's time to establish our own index, the "Shawarma Index in Lapa", or if you will, the Israeli "Big Mac" index.

The index that tracks the change in the price of such an Israeli dish proves how true this axiom is.

In 2018, a portion of shawarma in laffe cost about NIS 32, today, four years later in total, you will pay NIS 52 for it, a difference of 68%, not always with a direct connection to the increase in production costs.

Because as we said before: what goes up with us, does not go down in life.



In a free market, competition is supposed to raise and lower prices, and whoever offers the cheaper price will win the consumer.

The problem is that the Israeli market is seemingly free, but not really competitive.



In fact, the food market in Israel is so centralized that the graph that expresses consumer prices has already forgotten what it is like to be face down.

Precisely in the products under supervision, such as the bread that is now at the center of the public discourse, fuel, electricity and water, in contrast to food and consumption products, there are also price reductions.

The battle for uniform bread.

An industry source admits that there was no real reason to raise the price right now (Photo: Reuven Castro)

If there is no bread, let them eat lukshim

The last issue we dealt with was the price of controlled bread.

A product whose specific gravity is higher than its weight in the public shopping basket.



Ostensibly, there is no reason to raise the price of controlled bread right now, even though we are constantly told that the rise in price is necessary because of the rise in inputs.



Note the following data: Wheat prices fell by 23% from June 2021 to June 2022 and from April to June, during the war in Ukraine, which is considered the biggest and most threatening generator of price increases, the price soared at first, but almost immediately fell by 35%.

To this can be added the reduction in the cost of maritime transport, the extraction of traffic jams in ports and the moderate drop in the price of oil, which is still expected to plunge down.



So why exactly is supervised bread rising now?

Industry sources explain that the price increase is a correction of a three-year injustice, in which the price was supposed to rise and was frozen for political and populist reasons.



"The current price increase is not related to the prices of wheat and inputs," says one of them.

"It is possible that the prices committee will decide to lower the price of bread the next time, it all depends on the market situation. What's more, the increase in the price per family according to the CBS means one shekel a month.

We need to get the bread out of control at all, and then the prices will go down in the long run. "

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In collaboration with the Tamir Recycling Corporation

Israelis hate to come out suckers, but when it comes to consumerism, we are big suckers (Photo: ShutterStock)

We're all suckers

The economic situation of the State of Israel is very good relative to the world.



Inflation is low (4.4% in our country compared to 9.1% in the US), the deficit is low, the budget surplus is high, seemingly excellent opening conditions. So why are prices

here not stopping to rise?

We're all suckers and we'll not give up the shawarma in Lapa even if it costs 150 shekels. Went up, when the transportation prices go down, explain that the price of electricity goes up and so on in an endless loop of explanations that seem to sound like the justified ones there are.



Instead of standing on our hind legs and saying, stop confusing our minds with empty sentences, and explain that our cost of living is one of the highest in the world, so any further increase in price goes out of proportion, Israeli citizens lower their heads to get another head, In the supermarket.

Working from home in closures has jumped laptop prices.

Now that demand has dropped, is anyone lowering prices? (Photo: ShutterStock)

Work from home and work in the eyes

Another example: Experts predict that the prices of gadgets and computers that we consumed unconsciously during the corona closures and the "remote work" fashion, and then jumped to unreasonable amounts, will now be reduced.

Let's bet it does not happen, and if there is a reduction, it will be on the margins.

You know the trick, there is no real drop in the price in the Israeli market, there are only promotions or quantity discounts: "two for one price", "the other at half price", "three at a discounted price", as if a drop in price is a loss of respect, or a declaration of bankruptcy .



If we wait for Hogla and Diplomat, who again jumped prices a few days ago, to return the money when fuel goes down and electricity runs out, we will dry up just as we expected discounts after a drop in foreign currency value against the shekel, which boosted importers' profits. Are prices lowering? Not really.

  • Of money

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  • Cost of living

  • price increase

  • Shawarma

Source: walla

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