Tuna Starkist is not alone: what happened to Diplomat brand prices?
The protest against the 3% increase in the price of Tuna Starkist, missed many products of the Diplomat company that became much more expensive.
Even the retailers who competed with each other for discounting tuna products, only revealed that they had something to cut.
At the end of Yisri week we went to check what happened to the price of Diplomat brands in the last six months
Dr. Hezi Gur Mizrahi
Thursday, 04 August 2022, 09:02 Updated: 09:36
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The problem is the centralization, a diplomat is only a symptom (Photo: ShutterStock, Doron Shiner)
The uproar surrounding the importer Diplomat's intention to raise prices caused unprecedented reactions: the media devoted headlines to it, all sorts of celebrities decided to "ride" the issue in order to gain exposure and show the public that someone is thinking about it.
But buying a ton of Taman instead of a ton of Starkist is not the solution to the cost of living.
If anything, when checking it turns out that the cheaper tuna brands have become more expensive this year than the "outrageous" Starkist brand.
What's more - all the figures and organizations that wave the flag of war on the cost of living and even demonstrated in front of the owner's house, did not present any way, solution, goal or strategy to continue - apart from slogans it's not that there isn't a problem, there definitely is - and it's even more serious than the public knows.
Diplomat is not the main problem here and is not the only one to blame.
Alongside it is a group of 20 companies that determine what we eat, what shampoo we wash our hair with and how much we pay for it - and as long as we pay for it, there is no reason to stop raising prices.
While we are all dancing around the "golden tuna", it turns out that there are quite a few brands that the media frenzy has overlooked, but their prices have skyrocketed in the last year, "under the radar" and without any retail chain threatening to boycott the importer.
The prices of Diplomat brands by category, today versus the prices in January 2022 (Photo: Daniel Malachovski)
What is the secret of the success of Diplomat, which was founded in Israel 54 years ago?
Along with compliments for management and innovation, this is a company that has become the official representative of the world's leading brands.
From this situation, the way to obtain more brands is already easier.
The concentration in the world of brands is clear - and we are not talking about the local market but the global market, the one we so like to compare ourselves to.
A small number of companies control most of the brands we know and consume every day.
The global "Nestle" is the owner of Asem, "Unilever" was formerly known as Thelma, "Colgate Palmolive" which is represented by the Shastovich company, is also a giant in its field.
Diplomat represents the leading brands in the world, such as those of Procter & Gamble P&G, a powerhouse that generates more than 77 billion dollars a year and markets in more than 180 countries in the world with nearly 300 different brands, including: Ariel, Lenore, Tide, Pantene, Head and Shoulders, Gillette,
Procter & Gamble always knew how to identify trends, analyze consumption patterns and lead brands to success, and no less important: purchase the right brands.
She is a leading actress on almost every continent and in Israel she is represented by a diplomat.
And not only her: also the Heinz Kraft concern (the second largest food company in the world) with leading food brands such as Mondelez - Milka, Oreo, Jacobs, Toblerone, Cadbury, Philadelphia and more.
When you own the most desirable brands, you set the rules of the game and the retailer needs you.
I can testify personally, that for many decades the Diplomat company was not liked by the retailers and the trading method and the interpersonal behavior in front of it was arrogant and gloomy.
In my understanding, this is what made companies like Strauss and Esem grow at such a pace, because they always knew how to speak to the heart of the retailer and consumer.
Since the food law entered into force in 2015, the Diplomat company also realized that communication had to be changed and improved - an impression that only grew the day the market was opened to parallel imports of well-known brands.
Today, Diplomat is responsible for 4% of all sales in the local market in the field of consumer goods, the fifth largest factor in Israel.
When you hold such power and are weaker than the leading brands in the world, you are the one who dictates the market conditions, which is reflected not only in the difference in the prices of those brands between Tel Aviv and Berlin, but also in the prices of those very brands, which are imported to Israel through parallel imports.
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In which chain did Diplomat brands become more expensive? (Photo: Daniel Malachovski)
They took good advantage of the crisis at Strauss-Elite
The retailers shouted that they would not raise prices, but the fact is that they were quick to impress us with specials on canned tuna.
Meaning - they had something to cut.
In addition, it should be noted that sometimes not only do they cooperate with the increase in prices (on the part of the importers and manufacturers), but they even initiate the increase themselves.
I had a friend who used to say that a good partner is a partner in joys and sorrows... and translated into retail language, this means not only an importer who takes advantage of the opportunity to celebrate at the expense of the public when he apparently has a reason and ability to raise the price, but also one who takes advantage of his success and market conditions to benefit with his clients.
Let's examine whether Diplomat proved to be such a partner when the Strauss company (Elite) is dealing with the recall crisis and we the consumers and retailers are dealing with many shortcomings in the field of Elite's chocolate and sweets that led the market.
Following the crisis and the closing of the Strauss-Alit factory in the Galilee landscape, the lead was transferred to the Diplomat - and guess what happened?
The average price in the consumer chocolate segment jumped by more than 35%.
In the Rami Levy chain, the average price (regular milk chocolate by unit weight) in January 2022 was 3.61 NIS and today it is 5.90 NIS, a difference of 63%.
Also in the Beitan Wines chain, the price jumped from NIS 4.83 to NIS 6.90, a 49% increase in price.
We recognize a similar phenomenon in the bakery and waffle products segment, here too we have recognized a significant jump in the average prices for their consumer, with an average gap of 21%.
For example, in the Rami Levy chain, the average price was NIS 7.71 compared to the current price of NIS 9.90 - a gap of 28. In the Beitan Wines chain, the ratio is similar: from a price of NIS 8.64, the price jumped to NIS 10.90, a gap of 24%.
The difficult problem is that the day Strauss returns to the game, it will "face" high demand against the supply and with an average price that is 35% higher and will make sure to adjust itself to the new prices, because if you can sell high, who will sell low?
In which chain is the Diplomat brand basket the cheapest? (Photo: Daniel Malachovski)
I have all the brands
In the field of coffee
- with the brands
and Lor - we recognize an average increase of 13.60% in prices for the consumer and this phenomenon does not characterize the market data, since in the last year significant quantities of Jacobs coffee arrived in Israel through parallel imports which caused the Diplomat company to respond to the major retailers who do not cooperate with the corresponding importers and lower the price for the consumer.
Despite this, we have recently noticed a price increase in both the bean coffee and the espresso capsules.
Another brand in the Diplomat food products field is the
brand, which specializes mainly in
sauces and spreads
and is in competition with the Ketchup Esem and Mayonnaise Thelma brands, which are the leading brands in the segment.
Perhaps that is why we recognize that the price for the consumer did not increase and was even reduced by a rate of 2.80%.
It is possible that the strategy changes in brands where there is control of the market shares versus brands that still do not manage to capture the desired market shares.
Pringles brand of chips
we see (mainly in small private stores) a parallel import product at significantly discounted prices and we were even exposed to new flavors that the official importer has not yet launched in Israel.
Therefore, we recognize that the price to the consumer changes according to the availability of the corresponding brand in Israel.
The parallel imports are known for their inconsistency and in periods when there is a lack of parallel imports, the products of the official importer become more expensive.
The prices of the Pringles brand have increased in proportion to the increase in the price of consumer goods in the market, at a rate of 3.20% compared to January 2022.
The leading brand in the
field of dishwashing is the
, despite the parallel imports that led more than three years ago to a reduction in the average price, the price differences have not been eliminated and the brand's products do not show data of price increases in the reviewed period.
In the field of dishwashing liquids, there is one parameter that can affect the price, and that is the percentage of the active substance in the liquid.
We tested dishwashing liquid from the official importer and a bottle with a volume of 1 liter is sold to the consumer for an average of 13 NIS compared to a similar imported product with a volume of 1.35 liters which is sold at an average price of 10 NIS the difference is huge 1.3 NIS per 100 ml liquid from the official importer compared to 0.74 100 ml of liquid in the corresponding import.
In the field of
, the three leading brands are
Ariel, Tide and Noor
with washing powders, washing gel, capsules and fabric softeners.
The Ariel brand received a price drop with the introduction of the corresponding import.
The Tide brand does not have a parallel import because in other countries it bears different names that the Israeli consumer has not yet realized that they refer to the exact same product.
In hair care
, the Diplomat company stars with two main brands that lead the market:
Pantene and Head and Shoulders , the
brand has also
penetrated well into the local market.
The parallel import in the field of hair and body care is irregular and the import processes are not simple.
In the feminine hygiene
, Diplomat dominates the market handily with the brand Always and
feminine hygiene petticoats and bandages, the brand is a leader in the global market and in Israel in particular.
The parallel import led to a benefit for the consumer and the average prices compared to the ratio in the previous decade changed and were adjusted to the market.
Despite this, the brand shows an increase in price of 9.40% this year.
In the field
of oral hygiene
, Diplomat's well-known brand is
Although this is a well-known brand, it is not one of the leading brands in Israel.
Here, too, the parallel import managed to change the world order and in recent years the prices of toothbrushes have dropped a lot.
The field of
shaving and body care
is considered the most profitable.
leads the razor market and is also strong in related products, such as shaving gel and foam, deodorants and more.
Even those who prefer shaving with a machine will find the Braun brand, which is also marketed in Israel by Diplomat.
Attempts to import it through parallel imports were not very successful.
Diplomat also operates in other areas, such as
food and baby aids , the
that competes with Haggis and local brands, is preferred by many customers but does not lead the market.
In addition, the company also markets
baby food ,
Diplomat also markets Bioft products
Food and aids for domestic animals
Some of the brands are the well-known
Bonzo and La Cat
The world's leading brand in the field of
breakfast cereals, "Clogs",
is also in the company's brand arsenal, but the dominant brands in the Israeli market are Thelma and Nestlé brands, so the global popularity of the brand is not reflected in the Israeli market.
The company is also active in the field of meat substitutes (a field that is constantly growing) and in several other fields in which it owns well-known brands.
We put together a basket of 41 items from Diplomat products and checked in which chain you will pay more and in which chain the prices have become more expensive.
The 41 products that made up the diplomat's basket (photo: Daniel Malachovski)