A massive reform in Israeli food standards is on the horizon, as Prime Minister Yair Lapid announced Wednesday night that some major adjustments on the food import market are coming on January 1.
“Israelis always come back [from vacation] and ask, ‘Why is this cheaper in Berlin?’ Because in Berlin, there are European Union food standards, and they’re cheaper,” said Lapid in an announcement video. “We’re bringing those [standards] here to Israel. A huge decision was made today: In January, what’s cheap there will also be cheap here.”
Following a review by Israel’s Food Standards Review Committee, 97 Israeli food standards are to be canceled completely over the next four years, as well as 19 “almost completely,” according to the Finance Ministry. These cancellations will break open the Israeli food market to foreign importers and present a more diverse selection of foods to consumers while simultaneously working to drive down prices due to freer market competition.
These food standard cancellations will facilitate the import and production of a variety of products including ice cream, ketchup, tea, dairy products, pasta, rice, crackers, dried fruits, jams, a variety of frozen vegetable products, spices, dry soups, mustard, mayonnaise and more.
מהפכת התקנים יוצאת לדרך! ממשיכים להילחם ביוקר המחיה ומורידים בשבילכם את המחירים. pic.twitter.com/sjMIPjNkKd— יאיר לפיד - Yair Lapid (@yairlapid) September 28, 2022
Said Lapid, “The process of adjusting the standards to the European standard will bring down the cost of living and open the food market to competition. We will continue to act in the interest of the citizens of the State of Israel so that they can consume diverse, safe food at competitive prices.”
Why do the standards exist in the first place?
The 114 standards that stand to be affected make up nearly 90% of the 127 food standards that differ from those established by the European Union. “As the developed world moved towards freer trade – removing the formal customs duties and quotas and things like that – countries became very inventive about other ways to limit trade, and one of them was by creating standards,” said Prof. Dan Ben-David, head of the Shoresh Institution for Socioeconomic Research and an economist at Tel Aviv University.
"While a country’s decision to limit imports comes from a position of wanting to protect its local market and manufacturers, in the long run, it can lead — and in the case of Israel, has led — to monopolization and an expensive, overly-restricted market,"Prof. Dan Ben-David
These standards would theoretically allow other brands and imports, but only if they met a very specific set of criteria – criteria so specific, said Ben-David, that it’s “tailored to whatever Israeli company makes exactly that product, and nobody else does, and that way, others can’t import their items.”
While a country’s decision to limit imports comes from a position of wanting to protect its local market and manufacturers, in the long run it can lead – and in the case of Israel, has led – to monopolization and an expensive, overly-restricted market.
With that in mind, the reform of Israel’s food standards is a huge step in lowering costs and driving competition – a move that Ben-David thinks should be applied to the entire market.
“Fire away all across the board,” he said. “There’s no reason for Israel to have its own standards when you have the US and the EU spending a fortune making [universally relevant] standards.”
The only Israeli standards remaining would lead to a complete vacuum of regulation which would endanger public health. Despite this, the 13 surviving standards aren’t completely exempt from the chopping block; the committee has recommended an outline for further improving and adapting the regulations as much as possible to be more in-line with what is accepted in developed countries.
Health Minister Nitzan Horowitz noted that his ministry – which is involved in the Food Standards Review Committee’s operation – is in favor of the incoming paradigm shift.
“Besides the professional supervision necessary to maintain public health, we are committed to the fight against the cost of living, and to removing bureaucratic obstacles where possible,” he said. “After many years of trying to promote this, the Health Ministry is now leading this important move that will bring down prices, and this will be felt right in the pocket of every citizen.”
The crusade against costs continues
The move to cancel over 100 Israeli food standards that have until now blocked or impeded the import of foreign brands is the latest in Finance Minister Avigdor Liberman’s campaign against the country’s steep cost of living.
“We continue to take additional steps to lower the cost of living and treat the problem from the root, and today we bring great news with the cancellation of the unique food standards for Israel as part of the import reform,” Liberman said. “Adapting the Israeli regulation to what is accepted in the developed world is the key to increasing competition and lowering prices for the consumer. There is no need to reinvent the wheel and add bureaucracy with a unique and unnecessary regulation.”
Earlier this year, Liberman and former prime minister Naftali Bennett also reformed the standards for gadget and tech imports. Some of the products included in the reform are vacuum cleaners, pressure cookers, faucets, lamps, mattresses, floor tiles, barbecues and cribs.
“This is how we fight the cost of living from the root – open, real competition,” said Bennett. “From now on, anyone will be able to bring any product that meets the European standard,” he continued. “The market will be open to competition and a variety of products, without unnecessary bureaucracies and especially at much lower costs.”