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Limiting the control of the big importers? "The consumer will pay more" | Israel today

2023-01-24T16:15:39.963Z

Leaving a buffer: the importers are against the Minister of Economy's emerging step to impose severe restrictions on them • "Small importers who enter the market will not have the same bargaining power - prices may rise"



The major importers are against the government's emerging step to impose severe restrictions on their control of the market, in order to allow competition and fight the high cost of living in Israel.

The plans include eight large companies in the economy, importers and producers:

Shastovich, Diplomat, Unilever, Neto, Strauss, Assem, the Central Company for Soft Drinks and Tnuva.

Nir Barkat, photo: Noam Rivkin Fenton

Economy Minister Nir Barkat said in closed discussions: "The celebration is over, I don't owe anyone anything. I don't need the tycoons, it will not be possible to continue the oppression of the citizens of Israel."

Although the reform has not yet been officially announced, so we have not received official responses from the targeted companies, but it seems that the companies will not make life easy for Finance Minister Bezalel Smotrich and Barakat.

An experiment in the Israeli economy

"This is an experiment in the Israeli economy," an official at one of the importing companies, who preferred to remain anonymous, told us, adding: "Small importers who enter the market will not have the same bargaining power, and as a result prices may even rise. The large importers have a distribution and supply chain that has been built over years with large investments This supply chain is not at the disposal of the new importers, its establishment involves huge costs, which will eventually be passed on to the consumer."

According to him, "If an importer gives up the import of a certain product, another importer will start importing the same product exclusively to Israel, the competition will not increase and the brand will continue to be imported and distributed by another exclusive importer.

"There is an overestimation of the power of the exclusive importers vis-a-vis the marketing chains, and it is not clear to what extent this power leads to the excessive price of those products. Israelis have a tendency towards brands, especially premium brands, a fact that allows for price increases. This kind of treatment of the exclusive importers will not be beneficial."

Another company told "Israel Hayom" that "the concentrated and large purchasing power enables lower prices. If there are many companies, this will not be possible and the chains will tear them apart. Secondly, it is not at all certain that the move is legal, and it is certain that it is against the trade agreements with Europe."

Ministry of Finance, photo: Oren Nachshon

War of extermination

The ministries of economy and finance are currently formulating a bill that seeks to reduce the power of the major importers and producers in the economy, with the aim of combating the cost of living.

According to the proposal, an exclusive distributor of a large manufacturer will not be allowed to distribute products of other large and medium manufacturers.

That is, a large importer will be able to work with only one large brand or with several medium ones.

For example, it is possible that Stastovich, if defined as a large importer, will have to choose whether to import Colgate or Barilla products.

From the initial segmentation of the Ministry of Economy, it appears, for example, that Strauss controls 70% of the delicatessen market, Delpomat 58% of the washing powder market and also 73% of the razors, and the idea is to break up the centralized markets to allow more importers to enter.

Shastovic controls 55% of the toothpaste market, Unilever controls 74% of the mayonnaise market and 51% of the cornflakes market, and Nanova controls 65% of the milk market.

This is different from the situation in other developed countries, where there are several distributors.

Photo: Herzi Shapira,

The intention is to mark the large and medium suppliers, and impose restrictions.

The companies will not be able to hold more than one market share as monopolies - thus Tnuva, which controls 65% of the milk market, will not be able to control another market, and Unilever may have to lower its control rates in the mayonnaise market (Talma) or in the cornflakes market (Alofs), and choose between Thelma mayonnaise and Cornflakes to allow other players to enter the field

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Source: israelhayom

All news articles on 2023-01-24

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