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"The solution to the rampant prices? Reducing centralization and lowering tariffs" | Israel today

2022-08-03T21:11:40.456Z


Despite the current economic reality, Economy Minister Orna Barbiei is optimistic about her contribution to lowering the cost of living • and promises: "The actions we have taken will be passed on to the consumer in the coming months."


One after the other, the leading food and toiletry suppliers in the economy recently announced price increases, and as expected, this provoked public outrage and even calls for a consumer boycott.

If just a few months ago a similar attempt by the companies to make products more expensive was met with a determined fight by Finance Minister Lieberman and Economy Minister Barbibai, this time it seems that the government's voice on the issue has been silenced.

The explanation for this may lie in the election period, but not only in it.

When the prices of the services that are the responsibility of the state - such as electricity, water, property tax and more - rise, the bargaining power of the government vis-a-vis the food and toilet suppliers decreases, and those left to lead the fight against the importers are mainly the chairman of the Histadrut Arnon Bar David and the activists on social networks. Minister of the Economy Orna Barbiei is optimistic about the contribution of the moves she promoted to lower the cost of living, and believes that in the future Israeli consumers will see the results.

We hear calls for a consumer boycott every day.

Do you support this?

"I think it is necessary to look at the whole issue of the cost of living in a much broader perspective. I ask myself how it is possible that for years at the entrance gate to Israel every item and every product had to be checked, when most advanced countries long ago switched to a declaration model - instead of an inspection that takes time and costs, We are releasing these barriers and transferring most of the products to a declaration model. So this is a big thing that we have done in the import reform. It has been running since June, and I can already see the implications of the move.

"Another thing is the issue of standardization. This came together with the import reform. If there is an American and European standardization that provides a solution for a certain product, in my view, in many cases there is no need to make a unique adjustment for Israelis in each product. In the last year, we at the Ministry of Economy have gone through item by item, product product, to see where additional regulation is not required. The more barriers we remove, the more importers there will be."

But the phenomenon of exclusive importers still exists.

"On the day of the dissolution of the Knesset, I passed a bill that talks about parallel imports, meaning that the big importers will not be able to swallow up the small ones, and they are also expected to be punished in case they do manipulations. In relation to the past - in the transition from a supervision model to a declaration model, we increased enforcement in the markets, so that, God forbid, safety and public health are not harmed. We have increased the number of players, and I expect that this competition will be extended to consumers. I have no doubt that in the market there is concentration in certain products, for example in toiletries and food products, and it should be opened up as much as possible to competition. When I deal with Shiver, the gateway to the world of imports and standardization, I have no doubt that the issue will be extended to the consumer , I think already in the coming months."

The question is whether the companies will not adapt very quickly to the high price level in Israel.

"An excellent question. The very entry of an international company, with its ability to manage so many branches in the world, will create objective competition. This is the way to deal with centralization - another chain and another chain. At the same time, they (the international chains that plan to come to Israel - SG) have Objective barriers that undoubtedly we must address as well - for example the sticker process on the product, the uniqueness of the standard, among other things in the many products from the world of toiletries and health.

I know that the Minister of Health is dealing with reducing the gaps, and I expect that there will be a complementary move in the health system to remove all the barriers."

What can you tell consumers - when will we see significant discounts in basic consumer products?

"Lowering prices is a result of removing barriers for importers, increasing competition for retailers and transparency for consumers regarding prices and encouraging them to consume wisely. The more importers there are, the more competition we will see and the prices will drop. I can't tell you what day and time. You can tell the consumer 'don't buy, yes Buy', and you can tell the consumer that we have to work for him and remove barriers. I call it cholesterol that has accumulated here over the years. In the end, I reach the consumer.

"In addition to that, I expect the importers to roll out the savings in import expenses that will be reflected in the price to the consumer. We publish a comparative basket every month and see there differences of tens of percent between different marketing chains, which reach almost 40%, and I say to the consumer - come join this partnership of Dealing with the cost of living. It's not because the consumer is responsible, the government is responsible."

Just a few months ago, you and Lieberman were fighting companies that were trying to raise prices.

I can't hear you today.

Why?

"We conduct our dialogue. I talk to everyone. For example, on the issue of the price of bread, I asked not to raise the price despite the increase in the controlled price, and in truth the bread producers did not raise prices, they cooperated. But I say that the solution should be at the macro level, because also If the companies don't raise prices today, they will tomorrow or in a week. The solution lies in taking a broad view, dealing with barriers, reducing centralization, expanding competition, increasing the number of players and lowering tariffs."

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Source: israelhayom

All news articles on 2022-08-03

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