Treasury preparing proposals to loosen rabbinate monopoly over kashrut

Proposals seek to increase competition within kashrut licensing sector in order to reduce costs to consumers of kashrut supervision.

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February 2, 2016 19:56
2 minute read.
kosher mcdonalds

Kosher McDonald's in Asheklon, Israel. (photo credit: Wikimedia Commons)

 
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Finance Ministry Director Shai Bavad said Tuesday the Treasury was preparing several proposals to increase competition within the kashrut certification sector in order to reduce the costs to consumers of kashrut supervision.

Bavad made his comments to a new Knesset lobby launched by Kulanu MK Rachel Azaria designed to address concerns raised in recent months about the provision of kashrut services and what has been described in a recent report commissioned by the Finance Ministry as excessive costs caused by the monopoly held by the chief rabbinate over kashrut certification.

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The report published in December found that the cost of kashrut amounts to NIS 2.8 billion a year, some 3% of the cost of food consumption in the restaurant and catering business.

Between NIS 300 million to NIS 600m. of that amount is due to the monopoly of the chief rabbinate and stringencies not used by basic kashrut authorities outside of Israel that could be trimmed with greater competition in kashrut certification.

According to the Law against Kashrut Fraud, only the chief rabbinate and its regional branches may issue a restaurant, catering business or food product with a certificate describing the product as kosher.

“Like every monopoly, the service isn’t good and the product is expensive,” Azaria said during the meeting.

“Conservative estimates place the costs of the monopoly at least half a billion shekels, which translates to hundreds of shekels every year for the consumer. This is not a religious struggle, but a consumer struggle.”

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Bavad would not detail the precise proposals under consideration by the Finance Ministry, but said regional rabbinates would continue to issue kashrut licenses but that the inspection and enforcement of kashrut regulations would be removed from the auspices of the rabbinates.

Attorney Dan Carmeli, deputy director of the Israel Chamber of Commerce, said the chief rabbinate’s monopoly was an obstacle to food imports and a significant factor in the cost of food.

“The consumer pays up to five percent of the cost of imported food because of the monopoly on kashrut, amounting to some NIS 130m. a year,” he said.

Carmeli said that recognizing rabbinates and kashrut certification authorities abroad would create greater competition for kashrut certification services and give consumers greater choice and freedom to chose the level of kashrut appropriate for them.

Noa Bar-Nir, the director of the Association of Hotels in Israel, said kashrut costs amount to 7% of a hotel’s total expenses and that reforms to increase competition in kashrut certification would be welcome.

Bar-Nir added that the association had no issue with implementing the regulations of the chief rabbinate, but said local religious councils, the regional branches of the chief rabbinate, act without regulation and were imposing stringencies that were illogical.

Roni Hamama, the owner of a snacks business in Afula also complained of arbitrary rules set by local religious councils and questioned why standards and prices are not uniform across all 132 local religious councils.

“Each chairman of every religious council has all the power to determine what the kashrut will be like and how much it will cost. All of them can do whatever they want.”

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