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"Price increase after the holidays? I'm not sure I'll agree" | Israel today

2022-09-20T18:21:02.400Z


Happy New Year? According to Rami Levy, the shopping basket for the upcoming holiday will not decrease and the power is in the hands of the consumer: "to buy products on sale or cheaper" • And is full of criticism towards the government: "can't run a country"


The food sector has become very emotional due to the price increase of many companies in the economy.

Given the pressure on companies like Diplomat, some of the increases were delayed after the holidays, which means that consumers will soon notice more expensive prices in the food chains.

On the occasion of the approaching holiday, we spoke with businessman Rami Levy, owner of Rami Levy Sycamore Marketing, Good Pharm, Israir and more.

To the question of whether he thinks the holiday basket will be smaller this year, Levy said, "No. There are in-depth promotions. I think the consumer will now be smarter. He will understand one thing, that he has power in his hands. He will only buy the promotions and only buy things that are cheaper. All in all, all the brands are good brands.

There is a very wide variety on the shelf.

He might have less money left because the electricity went up, the property tax went up and all these things, so he might have a little less money left to buy.

But I think with everything related to food and our field, they will not save because they will want the things for the holiday but they will realize that they can buy cheaper, by not sticking to the brand that is the leader.

By smart buying you can save 20-30%.

And there are promotions where you can save even 50%."

Rami Levy with the cheapest basket for Rosh Hashanah, photo: Yonatan Shaul

Are there fewer promotions this year?

"No, absolutely not. They said in the polls that this year the basket became more expensive in the industry by 2-3%. If you look at raw milk or things that had no choice and they went up, with the inflation that exists now relative to the world, the basket in the world became much more expensive. If the basket in the industry became more expensive by 2 -3%, this shows that there are no less in-depth promotions. In any case, we have in-depth, massive and strong promotions, which are similar to last year and even better.

Our average basket is similar to last year.

It is not more expensive.

It may be that there was a sale last year and now it is not, but there is a sale that is parallel to it.

As for the general basket, with us compared to the rest of the world, the increases are much more conditional and there are almost no increases.

Where there is an increase is in the services you receive from the public sector.

There is a problem there because there is no competition.

This is a centralized and powerful monopoly.

In the private business sector there is competition and there is wide diversity.

If you see a product that is more expensive, you don't have to buy it.

In the services of the public sector which includes: duties, taxes, fuel and more, there is the problem because there is no competition.

If they decided to upload, then upload.

Every year the property tax is raised without justification.

Why would they raise the property tax?

At the end of property tax this is a very high expense.

Dormitories also went up, electricity went up, car prices also went up.

All these basic things, the one who controls them is the state and you can't buy them elsewhere or not pay property tax."

What about the increase in controlled prices such as dairy products?

"With us, even though the price of the inspectors has gone up, we still haven't raised them. When the holiday is over, we will go up. It's not in our hands. The state here has approved the increase."

What about the manufacturers who announced a price increase such as Diplomat, Unilever, Hogla Kimberley and Terra who announced that the prices of non-supervised products will increase?

"In the meantime, I have not negotiated and I have not done anything about it. I mean everyone, everyone who comes, I don't talk to them at all. It's the eve of a holiday now. There's nothing to talk to them about and they're not interesting right now. After the holiday, they'll come and ask for whatever they want and we'll talk to them.

The media is asking for the increase before them. Say Unilever, for example, came and said that on the first of November it is raising prices.

So what do you think now I'll deal with him and I'll say what you come up with?

I'm not interested in him now.

We will finish the holiday, we have another month and a half.

What do you think he comes and says are you uploading or not uploading?

It's not in the right direction now.

So what means of communication will I say if I upload or not?

It doesn't work that way.

I can say one thing, along the way, we will always make sure that our consumer buys the cheapest basket.

We will always guide our consumer to buy smartly and if he buys smartly he will be able to save tens of percent.

The consumer should understand that he has enormous power in his hands.

He is the one who can cause whether the price of the product will increase or not.

Even if a certain manufacturer raised a price and the consumer does not buy it, eventually the manufacturer will lower the price.

If the same manufacturer decided to raise and you decided to actually buy this product, then you are helping him raise the price.

In the private business sector there is competition.

We earn a total of 2%-2.5%, this is our profit, in the end.

If you come and look at why it's expensive here, it's because of duties and taxes and state regulation. If someone earns 2 percent and at the end they say a language is 30% more expensive, then you have to find somewhere expensive.

The expensive one is the duties and taxes."

Shopping at the Rami Levy branch in Bnei Brak // Photo: Gideon Markowitz,

However, 2% is after expenses and dividends for example.

"Dividends are within the second percent. When a dividend is distributed, I want the people of Israel to understand that all the people of Israel share in the dividend. If we are talking about public companies and they distribute dividends, those who have a provident fund also have a provident fund. The provident funds invest in the stock market. Most of the funds invest with us. The pension is managed by these funds. As soon as I distribute a dividend, they also receive a dividend and indirectly so do the consumers. If a dividend is distributed, it means that there are profits. When there are profits, it means that someone wins, all those who invest and that means, the majority of citizens in the State of Israel. But the question is whether the profit is porky or not porky. The total profit is 2-2.5%. For example globally, Walmart works on a gross profit of 24.5% and we work on a gross profit of 21.5%, which is much lower. The profit in Walmart is maybe 3-3.5 %".

Bottom line there, the prices are much cheaper.

"If you look at the gross profit, it means that if you want to find where it is expensive, you have to know how to look for it and get to it. There are tariffs here and there are no tariffs, if here there is 17% VAT, there there is no 17% VAT.

All these things in the end if they are much higher, then in the end the consumer pays because that's how it is.

The state collects as many taxes as possible.

Occasionally they boast that they have collected 10-15 billion shekels more in taxes.

Listen, if you collect 10-15 billion in taxes, that means it comes at the expense of the consumer in the end.

We pay taxes on fish, cheese, olive oil and everything.

Even on fruits and vegetables when we don't pay duties.

Since the beginning of the year, the price of sweet drinks has almost doubled by tens of percent.

They tripled the one-off.

They collect these taxes and the public pays.

When I import, for example, tomatoes in a season when there are none, I pay almost 30% duty on it relative to the price I buy from the farmer.

If you look at both honey and olive oil, if it's fish, yellow cheese.

Why do you need quotas?

Who are they coming to protect?

Let them open the market and on the other hand protect the farmer.

That the state will give him the water for free and that you lower the prices of the cultivation inputs.

If he pays duties on workers, don't collect duties.

It needs to be brought to a position where it can compete with imports and on the other hand compel it to grow more and there will be supply.

I only import when there is a shortage and the price is sky high because there is no justification for importing.

Importing is much more difficult.

It has a lot of costs in terms of personnel.

The easiest is to work with the farmer in Israel."

What do you think about the reform?

"The Minister of Agriculture did a good job and wanted to do an excellent job, even though he was fighting, but I said all the way through, that in this government it could not go through because it is a government that cannot run the country. The reason is that there is a prime minister here and there are eight parties and he is not the majority In this case, there were several members of the Knesset who came and said: As soon as you pass the agricultural reform, we will dissolve the government. All these things prevented us from leading the reform."

After the holidays are already here.

In the end, you won't have to give in to the suppliers and raise the price?

"I will do my negotiations, certainly not through you. I do and will do everything so that my consumer buys at the cheapest price.

When I see that there is no justification, then I fight and do not approve raises.

If, for example, there is a small manufacturer, all of his raw material is the basic material of the product, and we know that the flour has gone up by dozens of percent and the oils have gone up by dozens of percent in the world, and as soon as you don't raise him, he goes bankrupt, you know what?

So here you have to come towards the small manufacturer.

If there are large manufacturers, which they can absorb and I check that they can absorb, then I am not so quick to approve a price increase.

So far we have not entered into this negotiation.

In the meantime, I make sure that the consumer buys the cheapest basket, at a level that I can really meet.

Why should I fight with the manufacturer now when I have another month and a half to start talking with him?"

What are your plans regarding Israir?

"We are constantly thinking about how to create a synergy between the club card, to make a connection between online shopping, both on flights and vacations, and to make it cheaper for the consumer. At Bishrair, we do business to purchase hotels and yes, we create packages, through the club card. All this to create Synergy and to lower the price of the holiday, not just the flight.

We are in negotiations to buy a large European airline, so that it will help us in the end to lower the prices for consumers.

Now we have entered into a partnership with Brown.

We bought five hotels to reach the first one and lower prices."

How much can you lower the prices in the industry?

"At 10-15% on average and that's a lot of money at the end. There are also 30% and in some seasons there are also half price. Why did I come to Isherair at all? Before that, I had cooperation with them. If I do promotions for our club's customers I could, just For example, lowering a vacation from $1,000 to $600. On the other hand, we are talking about lowering the basket for all of our customers, lowering the basket for all vacationers. We are going to finalize the agreement with our club card. Those who buy more at our branches will be able to earn points for the flight

And the more they fly, the more they will earn for online shopping.

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Source: israelhayom

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