The Supreme Court issued a conditional order on Tuesday instructing the Minister of Finance and the Minister of Economy and Industry to explain why they will not accept the professional recommendation of an inter-ministerial committee from May 2022, according to which supervision of the prices of the few bread products that remain under supervision should be removed.
Reduction in the prices of eggs and supervised dairy products (archive)
In a hearing in the Supreme Court held yesterday on the petition of Angel and Berman Bakeries and the petition of Dganit Bakery, it emerged from the State Attorney's Office that the legal justifications that in the past were the basis for imposing supervision on bread no longer exist. As a result, a conditional order was issued instructing the ministers to explain why the Price Committee's recommendations would not be adopted verbatim, and the supervision of the prices of the few bread products under supervision would be abolished. The state must submit its response to the matter within 45 days.
Bakeries say that the bottom quintile in Israel consumes mainly pita bread and not bread under supervision, and that if price controls are lifted, consumer prices will actually fall. Moreover, Israel is the only country among developed countries in which bread products are regulated.
The weaker populations consume mainly various breads that are not supervised at all (illustration), photo: Dudu Greenspan
As noted, in 2017, Angel Bakeries and Berman, through attorneys Yaron Kostlitz and Aviad Olson of Kostelitz & Co., approached the Minister of Finance and the Minister of Economy at the time, arguing that the conditions set out in the law for imposing supervision on the price of bread – the absence of competition – no longer exist, and therefore the historical supervision over the price of the few bread products that remained under supervision – sliced bread, uniform bread and challah – should be abolished.
After five years of examination, in 2022, the Inter-Ministerial Price Committee, composed of professional representatives from the Ministry of Finance and the Ministry of Economy and Industry, published its recommendation to the ministers of finance and economy, according to which the historical justifications for imposing price controls on the few bread products that remain under supervision no longer exist, and therefore the supervision of the price of bread should be abolished, and only the profitability of bakeries should be examined.
Angel Bakery, Photo: Miriam Tzachi
Thus, the committee determined that the bread market is competitive, and that the consumption of supervised bread has declined drastically over the years, even among weaker populations. In addition, it was determined that the weaker populations consume mainly (90% of the monthly consumption) pita breads, rolls and various breads that are not supervised at all, and the average monthly expenditure per family relative to the bread products under supervision is only NIS 13 (about two loaves of bread).
She rejected the recommendations of the professional committee without any explanation.Orna Barbivai, Photo: Sarya Diamant
The day after receiving the recommendations of the professional committee, Minister Orna Barbivai, then Minister of Economy, rejected them without any explanation. As a result, Angel Bakeries and Berman filed a petition with the Supreme Court in July 2022. After the change of government, the current ministers – Smotrich and Barkat – were required to submit the recommendations of the Price Committee, but they too rejected them, claiming that the removal of supervision could cause "uncertainty" in the prices of supervised bread.
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