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Consumers' solidarity / Adv Ehud Peleg

 

I went to the greengrocery and checked out the prices, as I always do: the price of bananas - 7.90 NIS per kilo. "I do not buy" - I told the grocer - "at this price, you will keep the bananas on the shelf and you will not earn anything." The greengrocer replied with a smile: "I do not worry. There are enough suckers who buy at such price". And indeed, a minute later, a woman entered the store, chose a bunch of bananas and paid for it to the grocer. I felt both betrayed and frustrated. If we, the consumers, are willing to buy at any price – no wonder prices are so high.


We could try to analyze from now on, and forever, why the cost of living in Israel is so onerous. We could blame the government for not finding a way to deal with it. We could blame businesses and call them greedy. Despite all that, reduction of consumption by the public over the past year is precisely the factor that has led to a drop in prices in the supermarket chains in 2015 compared to 2014.


Basic trade rule is that prices are determined by supply and demand: the more goods compared to the number of potential buyers, the lower the price of the product for the consumer, because they try to entice us to buy and to buy more. This is also the reason why competition between businesses generally helps reducing prices. The findings of the Consumer Council Patrol show that food products in areas having many stores – in which there is a lot of competition - are significantly cheaper than the same products in areas where there is only one single store. When the residents have to shop in a store in their area, if they do not want to travel to remote areas, or cannot do so, the store treats them as "captive consumers", takes advantage of this fact and charges higher prices.


In this game of supply and demand, the consumers can affect the demand side, simply by avoiding buying. This way, the products will remain unclaimed on the shelves, and the ratio between the quantity of products and the number of buyers will change while businesses will have to make efforts, to woo customers, and to address to their heart and pocket. These wooing efforts will result in lower prices. This is also the idea behind "consumer boycott" – collectively avoiding shopping – so that products will stay on the shelves.


Doing so can be useful only if a large mass of consumers choose to show solidarity and to adopt the same line of action. Since it is very difficult to organize such a collective action, partly because each consumer behaves independently and is not even exposed to the same media – which makes it difficult to coordinate actions - Israel Consumer Council suggests a simple policy, which is logic and easy for the individual consumer to perform: each consumer decides for himself not to buy at any price, and will not hesitate to avoid buying (or to refuse buying) if the store where he shops has increased prices beyond a reasonable level. In such a consumers struggle, there is no place for indifference or for standing on sidelines. Demonstrations of such behavior will destroy the struggle for all the public, while our strength relies on our unity. Indulgence is actually equivalent to collaborating with the cost of living.


The proposed policy is particularly (but not only) good to consumers in areas where there is not a choice of stores competing between them. Towards a store charging high prices, we must have consumer self-discipline and refrain from buying for a certain time period or even go shopping as remote areas. Sometimes, the bother may result in substantial financial savings even for a single purchase, and in any case, this will force the storeowner in our region to stop taking advantage of his "isolation". Ultimately, the storeowner is also interested in selling his products, and he will realize that he will not survive economically, if he does not make the customers buy his merchandise.


Through this approach, at the overall level of consumer struggle, we will demonstrate our power as consumers to affect the price level, while relying on Hazal [Jewish sages of the Mishna, Tosefta and Talmud eras] beautiful statement of solidarity, "All Israel are responsible for one another".
Recent elections may have divided us, but at the consumer level, we are all united and committed to each other in the fight against the cost of living.

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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..