Israel's food reform targets unbearably high prices - editorial

That being said, more is needed to help Israelis break out of the burden of their country’s extremely high cost of living.

Prime Minister Yair Lapid looming over several staple Israeli food brands (photo credit: PRIME MINISTER'S OFFICE)
Prime Minister Yair Lapid looming over several staple Israeli food brands
(photo credit: PRIME MINISTER'S OFFICE)

Prime Minister Yair Lapid announced last week that Israel will begin to see massive food import reforms starting in January 2023.

Israel’s strict food standards have limited import opportunities and led to rising food prices nationwide. Starting this January, however, and rolling out for the following four years, 97 of those food standards will be canceled completely, along with 19 that will be “almost completely” canceled.

“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.”

Israeli Prime Minister Yair Lapid

“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.”

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. 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.

While standards are important as a tool for countries to ensure that only products of a certain quality enter their borders, many of Israel’s are anachronistic and almost impossible to live up to. Instead of being set in place to help protect the consumer, they were too often manipulated to benefit local Israeli businesses, especially those specifically catering to the definitions of the products being held to aggressively narrow criteria.

4 IN JERUSALEM | MAY 15, 2020RELIGIONHOME ECONOMICSSUPER HAMOSHAVA on Emek Refaim Street: Hopefully things are getting back to normal. (credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)4 IN JERUSALEM | MAY 15, 2020RELIGIONHOME ECONOMICSSUPER HAMOSHAVA on Emek Refaim Street: Hopefully things are getting back to normal. (credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

According to Prof. Dan Ben-David, head of the Shoresh Institution for Socioeconomic Research at Tel Aviv University, who spoke with The Jerusalem Post’s Zachy Hennessey, these standards are “tailored to whatever Israeli company makes exactly that product – and nobody else does – and that way, others can’t import their items.”

It anyway doesn’t make sense for “Israel to have its own standards when you have the US and the EU spending a fortune making [universally relevant] standards,” he said.

Fixing Israel's unbearably high food prices

The reason these standards need to go is because Israel’s food prices have become unbearable. The country has set unnecessary limits on food imports, completely ignoring America’s and EU’s more lax standards, which should be enough to guarantee food quality and safety while also creating market competition and making the lives of Israeli residents easier.

The reforms to food imports, then, are extremely important. Israel’s cost of living doesn’t meet the most basic function: that it be livable. Any move that the government can make to facilitate living in this beautiful country of ours is therefore welcome.

These import reforms, in particular, will reduce food prices because it will open Israel’s food market to foreign imports, allowing more food products to be brought in and made available for the Israeli consumer. This competition, in turn, will push local prices down.

Competition is healthy in any market – especially in a place like Israel which is a relatively small local one where it is hard to create genuine competition. While it is important to support local businesses and help them sell locally, prices have become unmanageable due to lack of such competition.

Opening the doors to more imports, by the way, does not mean immediate failure of Israeli food businesses; rather, it means more accessible options at all price ranges, rather than an effective monopoly over individual food industries. Israeli companies will have to reconfigure their prices and stop trying to take advantage of consumers when there are alternatives. It is problematic that an Israeli olive oil company can charge NIS 40 for a bottle while an imported olive oil is less than half the price.

That being said, more is needed to help Israelis break out of the burden of their country’s extremely high cost of living. What is happening in Israel is outrageous. Prices across the board – food, yes, but also housing, basic needs, gas, electricity, tech and so on – have risen to an unseemly extreme.

Until now, the government has let too many policies slide to benefit the minority of merchants within the country while the majority of us suffer the consequences. It is a welcome announcement to finally start to see this change.