Israel orders 15 food giants to release financial statements on price hikes

The government wants to see if companies are raising prices unfairly and contributing to the rising cost of living in Israel.

An Osem factory is seen in Sderot, southern Israel, taken on May 11, 2023 (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
An Osem factory is seen in Sderot, southern Israel, taken on May 11, 2023

Economy Minister Nir Barkat has taken the unprecedented step of demanding 15 giant food companies disclose their financial statements within 21 days, including itemized production costs and profit figures on Sunday.

Dr. Jonathan Bezalel, head supervisor of prices at the Economy Ministry sent letters demanding that the largest manufacturers and importers, in which he demands comprehensive data on their production costs, including demands to present financial and pricing reports.

The letters were sent in accordance with Chapter VII of the Law on the Supervision of Prices and Products, sections 6 and 31, which deals with examining the costs and profits of big manufacturers and under which the importers and manufacturers are required to submit a full breakdown of their production costs and profits within 21 days.

The 15 companies which will need to submit reports within 21 are Diplomat, Osem, Shastowitz, Sogat, Hogla Kimberly the Central Bottling Company, Strauss, Willi Food, Sano, Jafora Tabori, Wissotzky Tea, Neto Trade, Abbott and the Gori Company.

Barkat had this to say: "We will fight an uncompromising war against monopolies and cartels that unjustly oppress the public. The giant companies got used to milking the Israeli public like a cow. My directive is to act with all the tools at our disposal, no matter how serious they may be, to fight the deep failures in the food market in Israel.

"We clearly see that the producers and importers are taking advantage of the high centralization and lack of competition in the markets to raise prices. We will not hesitate to use this kind of mechanism to fight entities that ignore the public and raise prices unfairly. While the citizens of Israel are moaning, the monopolies are raising prices at a shocking rate, and this is at a time when the prices of inputs and the prices of maritime transportation are constantly decreasing. The celebration is over."

 Nir Barkat (credit: RONEN TOPELBERG) Nir Barkat (credit: RONEN TOPELBERG)

Government is 'most predatory monopoly' in Israel - Manufacturers' Association

In response, the Manufacturers' Association of Israel put out a statement saying: "The most predatory monopoly in Israel is the Israeli government, which makes the cost of living and the cost of doing business extraordinary compared to any country in the world. The government is the one that increases and continues to increase the prices of apartments, cars, fuel, electricity, water, property tax and more, which also harms the disposable income of the country's residents and also makes the products and services in Israel more expensive."

They continued saying: "The government monopoly has also set VAT rates for food among the highest in the world, thus raising food prices artificially in order to collect tax.

We are sorry that the economy minister, like many of his predecessors, is trying to divert the public's attention from the real reasons that cause the public to suffer, as he calls it. The public in Israel is fed up with promises and knows very well that the one who is cheating them is the Israeli government, with the unreasonable taxes on cars, fuel, land, apartments, property tax and food, and on the other hand, manages the state budget in a wasteful way - money that comes out of the pocket of every citizen in Israel."

The Association will also publish a series of comparisons as they explain: "In the coming days we will publish a series of international comparisons of the government costs in Israel compared to the world and we will help the public in Israel understand who exactly is oppressing them and how. Harming the business sector will no longer be the easy way to escape the fire of the cost of living protest. The government's party at the expense of the citizens is over."

Finance Minister Bezalel Smotrich also announced on Sunday that a public committee will be established to dismantle monopolies and food giants. "The citizens of Israel deserve to receive more and pay less," Smotrich said.