Interior Minister Eli Yishai said on Wednesday that manufacturers must bear the cost of lowering prices.
Only tackling manufacturers' pockets, he said, will lead to cheaper products.
"Israel should advance in legislating the removal of barriers on importing products from abroad and lowering taxes on local consumers," Yishai said.
"Opening the market in all areas, under supervision, will lead to lower prices."
The comments address a controversy over Israeli candy products being sold more cheaply abroad than in Israel.