Knesset study: Israeli food prices 25% higher than EU

Israeli prices are very high in food sectors where competition is low, or which are price-controlled, such as milk, cheese, and eggs.

By GLOBES
Eggs at market 370 (photo credit: Marc Israel Sellem/The Jerusalem Post)
Eggs at market 370
(photo credit: Marc Israel Sellem/The Jerusalem Post)
Food prices in Israelare 25% higher than in the EU, according to a study published on Tuesday by theKnesset Research and Information Center. It adds that food prices in Israelrose by 16% in real terms in 2005-13, compared with a 1.8% gain in the EU.
The Israeli Food Prices Index is 19% higher, in terms of purchasing power, thanthe OECD average and 25% higher than the EU average. Israeli prices areparticularly high in food sectors where competition is low, or which areprice-controlled (such as milk, cheese, and eggs). The only category in whichIsraeli prices are lower than the OECD average is fruits and vegetables.
The study was conducted at the request of the Knesset Joint Economic Affairsand Finance Committee for the Promotion of Competition in the Food Sector,ahead of debate on the bill to promote competition in the food industry. Thebill will implement some of the Kedmi Committee's recommendations by usingthree tools: regulating retailer-supplier relations; increasing competitiongeographically; and improving price transparency.
Analysis of the factors for the higher increase in Israeli food prices,compared with the EU, found that they were not the rise in prices of importantinputs (commodities, electricity, water, and labor), or tax rates, but thecentralized structure in the production and retail sides.
The study recommends restricting market shares in the production and retailsides of the food sector, expanding the market share of private labels, and toappoint a data collection agency to review regulatory progress and monitor the  drop in food prices. This agency will publish a public report once a year.