The Minister of Economy, Orna Barbibai, has decided not to approve the recommendation of the Prices Committee to remove the control over the price of bread.
The recommendation was given last night (Monday) in light of the existing competition in the field between the bakeries and following the sharp rise in wheat prices.
The committee sought to move from price controls to a model of ongoing monitoring of market competition and player profitability.
The recommendation of the inter-ministerial price committee requires the consent of the two ministers in charge of price control - the Minister of Economy, Barbibai, and the Minister of Finance, Avigdor Lieberman.
Since the Minister of Economy is not willing to approve the recommendation, the removal of control from the price of bread will not be approved.
The issue of bread price spending from the regulator has come up several times in the past as well, but decision makers have had a hard time approving the move.
The removal of control from the price of bread will cause it to rise immediately, because the price of wheat has jumped by tens of percent since the beginning of the year, partly due to the war between Russia and Ukraine.
The bakeries may turn to the High Court for help on the matter following the regulator's refusal to sign the recommendation.
"Supervised bread is a basic product"
Minister Barbibai responded to the committee's recommendation and wrote: "I thank the members of the prices committee for their professional work and the recommendations they passed to my decision and the finance minister's decision, which include a recommendation to remove bread price control and continue to monitor only bakery profitability and price changes."
Barbibai added that "supervised bread is a basic product, which should be accessible in every home, especially for those for whom bread is an essential component of family nutrition, and they do not have access to uncontrolled bread products. The Ministry of Economy has been investing very much in the past year .
According to the Minister, "Despite the rise in world wheat prices, rising energy prices, supply chains and raw materials, my position is that there is no reason to deviate from existing supervision policies. The expectation is that the business sector will avoid price increases during this challenging period. At this point, do not accept the committee's recommendation. "
Barbibai promised that it will continue to negotiate with those in the field: "We will continue the dialogue with the Prices Committee and with industry, in order to find appropriate solutions that will save bread as a basic consumer product at a fair price, including examining the price of wholemeal bread." ".
The market share of supervised bread has declined
A new report by the MP, written at the request of MK Idit Silman, Chairman of the Health Committee, presents data on the bread market in Israel, the process of determining and updating the prices of regulated breads, the price control mechanism, addressing health aspects of white or whole wheat bread consumption and recommendations On the subject of supervision in the bread market.
The report "Description and analysis of the mechanism for controlling the prices of bread products in Israel" written by Hedva Kaplinsky, an economist at MMM, reveals that the total monetary sales of bread products sold in retail chains in 2018-2020 were about NIS 1.5 billion per year The total monetary sale of the supervised breads was approximately NIS 270 million per year.
Additional data showed that in recent years there has been a change in the patterns of bread consumption in Israel, the share of regulated breads has decreased while the consumption of specialty breads and rolls has increased.
The report found that in 2018 households in the lower income quintiles spend more on white flour products, not necessarily the supervised one, and households in the higher income quintiles spend more on specialty breads that are considered healthier.
The market share of specialty breads has risen, Photo: Reuters
The bread market in Israel consists of hundreds of bakeries, the most central of which are the Angel Group, the Berman Group and the Davidovich Group (including a regional cereal bakery).
These bakeries make up about 80% of the bread market and have girls' bakeries scattered all over the country.
The market shares and dominance of the bakeries vary between the different types of bread.
It is important to note that the Knesset report also addresses the question of health considerations in deciding whether or not to have products under supervision, as well as whether the old supervision mechanism or the development of a new mechanism for controlling the prices of wholemeal breads should be applied instead of the current supervision.
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