In an unusual step, Finance Minister Avigdor Lieberman yesterday appealed to the head of the American Trade Commission, Lina Khan, and the European Commissioner for Competition, with a request to facilitate parallel imports to Israel in order to combat the high cost of living in the Emirate.
"During the last decade, price levels in Israel rose dramatically, among other things, due to the fact that exclusive or official importers took advantage of the lack of competition in the market. The Israeli government acted to remove unnecessary barriers that limited the activities of the parallel importers," it said.
"Due to agreements between manufacturers and official importers, the parallel importers face unreasonable difficulties in importing consumer products to the Israeli market. In addition, Israeli importers are forced to purchase goods from the manufacturer at higher prices than the same products are sold to importers from other countries. These difficulties contribute to the limitations on competition that exist in the Israeli market and the Israeli consumer at a disadvantage."
"Out of a desire to preserve and encourage competition between the markets and to protect consumers from excessive prices and the negative effects of exclusivity agreements, I believe that we must strengthen the ties between the competition authorities of both parties and deepen the cooperation and information sharing between them. Therefore, in view of our common competition protection norms, I propose that we work in cooperation to ensure fair treatment for parallel importers so that they can operate freely without unfair barriers to competition," the letter reads.
Lieberman added: "Also, it is important that the competition authorities work together to ensure that competition laws are enforced against both importers and exporters so that consumers on both sides can benefit from the fruits of free and fair competition. Finally, I believe that both sides can mutually benefit from an initiative to establish a multilateral legal framework on issues of competition between countries and trade blocs".
In Israel, unlike many other countries, the system of exclusive importers has developed greatly, which causes a lack of competition between suppliers and, as a result, the possibility of charging high prices.
For example, almost every known toiletry product is imported to Israel by one importer.
On the other hand, the prices of the products imported through the parallel import, i.e. not by the official importer, are lower, but these are smaller quantities that do not allow for regular supply to the chains.
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