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One year for the regulations requiring signs indicating price-controlled products

August 2012 saw Consumer Protection Regulations come into force, requiring businesses selling foods subject to price control to place a sign near the shelves with those products, listing the price-controlled food products and their prices. The Commodities and Services (Control) Law was intended, among other things, to ensure the supply of basic products to the general public at reasonable prices. The regulations require all businesses selling food (grocery stores, convenience stores, etc.) to place, near the shelves stocking dairy products, bread, salt and eggs subject to price control, a sign detailing the products and their prices. Maximum prices are set by the Ministry of Economics and the Ministry of Agriculture for about 20 products, and these prices are subject to control. (The products may also be sold to consumers for a lower prices than those set in the regulations.)


Following is a link to the table of products subject to price control, with their prices.


http://www.moital.gov.il/NR/exeres/839F8039-FB90-494F-B0CE-6C6EE0350060.htm



Consumer awareness of the existence and availability of price-controlled products, and of their lower prices, is of major importance at a time of rising food prices, and in light of the struggle against the cost of living. About three years ago, the Council noted the problem of a lack of awareness among the general public as to the existence of price-controlled products, and proposed the idea to require signs indicating those products. The Council’s suggestion was presented before the Kedmi Committee on Competition in the Food Market, and was adopted by the Government.


Checks carried out this week by the Israel Consumer Council showed that, in dozens of supermarkets and minimarkets throughout the country, the signs are either not displayed at all, or there are deficiencies in how they are displayed or their clarity. Sometimes the signs are positioned far from the price-controlled products, and closer to an alternative product not subject to controls. In such a case, the positioning of the sign is deceptive: the consumer may associate the controlled price with the product not subject to control, and may thus purchase a more expensive product.


The data collected by 54 Consumer Council Patrol members related to 107 points of sale (large supermarket chains) and 24 minimarkets and grocery stores. All of the data are based on Consumer Council Patrol checks carried out over a two-day period, 5-6 August, 2013.


Based on the findings in the field, the various points of sale were allocated one of three status levels:


1. Satisfactory: The sign is displayed visibly, and clearly indicates that it relates to products subject to price control.


2. Unacceptable: The signs are missing in at least one of the departments checked (milk, eggs, bread).


3. Inadequate: There are signs, but they are not displayed clearly, or do not state explicitly that the prices shown are controlled prices.

Summary of Findings


The minimarket and grocery store sector is almost completely lax in observing the regulation. About 88% of the stores were found to be unacceptable in this area. In these stores, we also found that they were also lax about marking prices on products.


In the larger supermarkets, the situation is somewhat better, but still far from perfect: only 59% were found to be satisfactory. About one third of the supermarkets do not display the prices at all. One would have expected that it would be particularly the larger organizations, such as the major food chains, with a central administration, that would keep to the law and protect consumer rights, but that was not the case.


Among the supermarkets that were checked, the most serious situation was observed in the Bitan Wines chain – 63% of the branches checked were found to be unacceptable. 12% of the branches were inadequate, and 25% were satisfactory (see charts below).


Within the two larger chains, Supersol and Mega, the situation definitely requires improvement, particularly when one considers that these chains together control the majority of supermarkets in the country, and serve the majority of consumers. In most branches of these chains, the situation was satisfactory: the signs are large, clear and precise. In the Supersol chain, 78% of the branches were found to be satisfactory, while Mega had 65% of its branches rates as satisfactory. It is clear that adherence to the law needs to be more across-the-board, encompassing all the branches.

In a survey carried out for the Consumer Council, this week, by the Geocartography survey firm, 70.7% of those surveyed reported that had never seen signs alongside the price-controlled products in the past year. (Survey attached as a separate file.)

And what does the public know about the products subject to price control? Can they identify them? It turns out that public awareness of these products is very low. 55% of the public are unaware that butter is subject to price control, 40% are unaware that white bread is also price-controlled. 52% of the public do not know that salt is subject to price control. 83% did not know that yeast was subject to controls. Milk is more in the public eye, but there are still 23% of the public who don’t know that that the price of milk is government-controlled.


On the other hand, cottage cheese is not subject to price control, but 52% of the public mistakenly believe that it is.

Consumer Council CEO, Adv. Ehud Peleg: The ability to identify, and prefer, price-controlled products allows consumers to bring down the cost of their purchases, and to address the cost of living with the aid of a convenient, accessible tool – the sign alongside the product shelf. The Israel Consumer Council’s research findings show that many businesses are ignoring their obligations under these binding regulations, and thus are preventing the public from making more intelligent purchasing decisions. This contempt for legal obligations on the part of businesses would not be possible were there to be a strenuous enforcement effort on the part of the authorities. The Consumer Council will pass its findings, accompanied by the names of the business involved, to the Fair Trade Authority, so that the necessary enforcement action can be carried out.”

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The Israel Consumer Council is the largest consumer organization in Israel. It is a statutory, non-profit corporation which works to defend consumers and protect their rights, by handling complaints, seeking solutions...