Ministers reject Comptroller report on food prices

Shalom Simhon says his ministry already dealt with high food prices; Yacimovich: Report a "serious indictment" of gov't.

September 12, 2012 15:56
3 minute read.
bread [illustrative]

bread [illustrative]_370. (photo credit: Reuters)


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The Industry, Trade and Labor Ministry rejected the findings of the State Comptroller’s Report on food prices Wednesday, saying it had responded to the claims contained in the document during the past year and had taken “significant steps” to deal with the issue.

It pointed out that one of the first things Agriculture Minister Shalom Simhon did after entering office was to order, together with Finance Minister Yuval Steinitz, the establishment of the Kedmi Committee on food prices.

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The Kedmi Committee published its final report in July, which will be brought to the cabinet soon for approval. It recommended that the state restrict the market share of leading suppliers and retailers, reduce customs duties and increase consumer protection.

While the state comptroller focused on the impact of doing away with price supervision on certain products, the Industry, Trade and Labor Ministry statement said, Kedmi examined “all the components of the food industry” and found that several market failures were behind the soaring prices.

The statement pointed out that Kedmi instructed Simhon and Steinitz to compile a list of basic products to be placed under temporary supervision until the report’s full implementation.

Simhon expressed anger at the manner in which the Comptroller’s Report was released to the media. He argued that it was unprecedented for the report to be released before its official release date and without notifying the relevant ministers beforehand. Several media outlets published the contents of the report prior to its official 4 p.m. Wednesday release.

“This conduct is hard to understand. It would have been fitting for publication on one of the most important matters on the daily public agenda, on the eve of the holidays, to be made in a fair and respectable manner,” Simhon said.

The Treasury said in its official response that last year’s Trajtenberg Report on reducing the cost of living concluded that price supervision was a partial and inefficient tool that should only be used as a temporary solution. It added that implementation of the Kedmi Report recommendations would reduce the price of raw milk by 15 percent, encourage competition and reduce prices of other products being sold to consumers.

Massive consumer protests over the cost of living were held last year, putting the issue on the government agenda. The protests broke out in June following a boycott of Israeli-manufactured cottage cheese by Facebook users.

Itzik Elrov’s “consumer movement,” which led the dairy boycott, said in a statement prior to the report’s release that it hopes the state comptroller identifies the real problem: “that corrupt government bureaucrats have given businesses a ‘license to exploit.’” “The gatekeepers that were supposed to protect our pockets have acted to the benefit of the price hikers,” the statement said. “The public will fight these government officials and the corporations that increase their unfairly and unashamedly increase their prices.”

Labor Party chairwoman Shelly Yacimovich called the report a “serious indictment” against the government, saying that this proves it abandoned the nutritional security of the Israeli public to market forces.

“Even when it saw that prices were increasing by dozens of percentage points, the government continued to remove supervision and with its own hands caused prices to rise,” Yacimovich said, referring to yellow and cottage cheese, among other products.

“All the more so, the government did not think for even one moment to supervise basic products that were not already under supervision, and therefore those products saw an exceptional rise,” she added, explaining that these products included cocoa, margarine, black coffee and chocolate.

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