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Hen no longer lays golden eggs / Adv Ehud Peleg

The Central Bureau of Statistics (CBS) has recently released some data showing a significant decline in private consumption and there are some concerns about a probable slowdown in the economy.

 

Those findings have surprised some people, despite the fact that there were warning signs for some moment. Only people who are disconnected from the public or who ignore their distress and their emptying wallet, did not sense a thing.


Raising of governmental taxes and increased prices of products and services, have left less money available in people's hands; accordingly, people have been forced to reduce their expenses. The range of individuals having difficulty to make ends meet has been growing and has also spread to deciles that were considered as relatively strong in the middle class.

 

A survey commissioned by the  Israel Consumer Council and conducted by Geo Cartographia matches CBS findings and revealed that 52% of respondents indicate (agree and strongly agree) that high prices have led them to consume less products  in the last six months, while 17% agree with this statement to a moderate degree.

 

Another survey that was commissioned by the Consumer Council has examined the effect of  rise of fruits and vegetables prices on reduction of the quantity purchased by consumers:  46% have testified that they will reduce consumption of fruits and vegetables if their price increase in 20%, while an increase of 50% will result in the fact that  67% of the consumers would reduce  the amount of basic vegetables they buy and 72% (!) will reduce the amount of basic fruits they buy.

 

When the public reduces its consumption, the business sector is ultimately affected: decrease in chain stores proceeds, layoffs and branch closures are phenomena deriving from the parsimony consumers cut on themselves.

 

This basic logic has apparently skipped away from the understanding of some economic elements, who worship free market as supremely important as well as maximization of short-term profits as the only guiding principle, at the expense of consideration for consumers and their welfare.

 

These elements are now surprised that hen that used to lay golden eggs has announced sanctions.

 

What did you think? That we would not react when you hurt and exploit us? That we will be indifferent while you covet our small amount of  money? Even Shakespeare's Merchant of Venice had enough wisdom to argue "if you wrong us, shall we not revenge?" In our case, however, this is not about revenge, but rather about legitimate and necessary self-defense.

 

The population that has became economic punching bag, has responded with the only strength he has – the refusal to purchase.

 

Israeli consumers have learned to say no to marketing temptations. It began as a collective protest in the summer of 2011, and continued in a private mode through personal shelf test.  The wallet, which once opened easily while the tune of business owners' ads played in the background is no longer automatically extracted, and more consumers have responded to the Consumer Council's call: "Today, we take the account into account".  Those who, in the past, had chosen to ignore the consumers as significant players in the economic equations and set them to the impossible cost of living, are now forced to face hurt and angry consumers, but mostly -  wiser consumers with more self-discipline and discretion in their shopping decisions. The Israel Consumer Council has warned for some time that "it takes two to tango." We have warned that without a buyer, there is no seller and that without a consumer there is no producer. We have cautioned that we will have no other choice but to leave the expensive products on the shelves, in a way that will not translate, literally, to "Good money goes to the merchant". We have mentioned that business owners' bank accounts are not filled with the products remaining on the shelves, but only through those who are found in the client's basket.

 

It seems that the warning was not sufficient to make the business sector understand that consumers' abuse has some limits and that these limits have been crossed a long time ago.

 

Signs of economic recession are a contemporary and continuous expression of protest of that summer.

 

This reaction stems from distress, but it is also a badge of honor to the Israeli consumer, who knows how to control his shopping urge and applies the national feature – HaDavkah – "on purpose" - towards those who consider him as a "Frayer' ("sucker") and continue to take advantage of him.

 

Life seeking industries should have this time a good understanding of what is happening. Proportionality and fairness should return to the pricing process of businesses and services in Israel. A good understanding should be achieved in the business sector about the need to bring exploitative relations to an end and regarding the fact that businesses and consumers are partners in the Israeli trading life who depend on each other.

 

This approach will also lead to a much better reality compared with the alternative – instead of hanging out together and to get the hang on the situation, they might be hung side by side through an economic noose.

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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..