In recent days, the State of Israel has been in turmoil following a wave of rising prices and rising prices.
The "immediate culprits" are, to a considerable degree of justice, the food chains, retailers and other factors about which there is a fear that they will take advantage of the global wave of price increases to increase profits and "cut a coupon" from the situation.
The government does not seem to be ignoring this.
Last night, the Prime Minister, the Minister of Finance and the Minister of Economy appeared in front of the cameras, and announced a comprehensive economic plan.
The plan includes tax credit points for families who meet the set conditions, reduction of tariffs and partial subsidy of the price of electricity.
The Minister of Finance said at the event that a committee had been set up, headed by the director general of the Ministry of Finance, which deals with the field of centralization in the food industry.
While the government cannot hide a wave of price increases that originate in the circumstances of the global economy, it certainly has the tools to reduce citizens' spending, even in times of stability.
It simply does not use them enough and does not implement decisions made in previous committees.
Maybe it's time for that?
The Israeli consumer, as is well known, pays dearly, long before the current price increase.
According to the State Comptroller's report for 2021, the rate of purchasing power in the food of an Israeli citizen is about 31% lower than that of developed countries (OECD), and 51% lower when counting only EU countries. In other words: for the same amount Money, an Israeli citizen can buy significantly less of the same food, compared to citizens of the EU and other developed countries. Some have argued that this is a consequence of the prosperity of the Israeli economy. Israel.
The food market in Israel is very concentrated.
As of 2020, the ten largest food suppliers held a market share of about 54%, while in 27 of the 40 food categories the market share of the three largest food suppliers exceeds 80%.
The government and the public bodies in charge of the issue recognize the problem, but do not make sufficient use of the tools given to them to deal with it.
In 2012, the recommendations of the Kedmi Committee were published, which was established with the aim of examining the competitions in the food industry.
In its recommendations, the committee proposed to examine whether the large food suppliers acquired by small food producers had led to a reduction in competitiveness in the food industry.
Since then, the Competition Authority - or any other public body - has not conducted an examination of whether the major suppliers have indeed reduced competitiveness.
In 2014, the Food Law was enacted, which aims to increase competitiveness in the industry and enable price transparency for the consumer.
The Competition Authority was given various powers to implement the law and examine its impact on the industry.
Did she use them?
It seems not enough.
The same is true of the Trachtenberg Commission's recommendations, for example, some of which have not been implemented, including substantive recommendations that directly relate to lowering the cost of living.
For more than 20 years, the Competition Authority has not declared a monopoly on the food market.
In this context, the Competition Authority argues that declaring a monopoly is not necessarily an effective tool and there are more effective ways to increase competition.
To this end, the legislature provided her with additional tools.
However, it turns out that the competition authority does not really use them either.
The Authority has declared only one concentration group in the food and consumer goods industry, since it was given the legal authority to use this tool in 2011. Also, despite the powers granted to it in the Food Industry Competitiveness Act, the Competition Authority did not use the legislature's tools to actively address the problem. The geographical centralization in the food market and it also does not even proactively examine whether the contracts between retailers and suppliers comply with the provisions of the Food Law.
The activity of the Ministers of Finance and the Economy vis-à-vis the food chains is important and welcome, and recently there have been publications about an examination conducted by the Competition Authority as to whether some of the increases in the food industry are contrary to competition law.
However, we must demand from the government and the competition authority to act in accordance with the powers given to them, not just during a wave of price increases.
Anyone who has not used the tools at his disposal to protect the competition and interests of the Israeli consumer for many years, should not be surprised that it is much more difficult to pull these tools out of the boyd from now on.
Were we wrong?
Fixed!
If you found an error in the article, we'll be happy for you to share it with us