The cabinet on Sunday approved the creation of a committee on bringing down food prices by advancing “parallel imports,” or cheaper imports of products already available on the shelves.
“There is an unacceptable phenomenon of historic arrangements that are causing an increase in food prices and consumer exploitation,” Prime Minister Binyamin Netanyahu said at the meeting. “Without opening up the markets to imports, there will not be a reduction in food prices.”
Israel’s food prices have soared from 10 percent below the OECD (Organization for Economic Cooperation and Development) average in 2004 to 25% above it in 2013.
A Knesset study released last week found that while the cost of food went up just 1.8% in the EU from 2005-13, in Israel it rose 16%. In all the food categories, only fruits and vegetables were found to be cheaper in Israel.
Citing a Finance Ministry study that found two chains dominating some 60% of the retail market, Netanyahu called the retail market a “cartel” that needs to open to competition.
“The meaning of this statistic is that there is no competition,” he said. Reducing import barriers, he said, would help the problem.
The committee is to be headed by Prime Minister’s Office director-general Harel Locker.
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