The Council welcomed the findings of the * Kedmi Committee, which revealed the cost of living in Israel in the years 2005-2011, in comparison with the position in OECD countries.
However, the Council regretted the fact that warnings issued by consumer groups regarding the cost of living in those years were ignored by the government, and that these were not even reflected in the Report, although they had been documented in the minutes of the relevant Knesset committees and letters to government departments.
The Council warned the Committee that the steps that the Committee had recommended in the Report would only lead to long-term solutions. CEO of the Israel Consumer Council, Adv. Ehud Peleg, called on the Committee to also recommend more drastic steps that would produce results that could be felt as soon as “the next meal.”
The Consumer Council reminded the Committee that the high level of prices has remained almost unchanged, even though a year has passed since last summer’s protests, and the public is beginning to lose its patience.
The Council called on the Committee to immediately place under price control an “anchor product” from each basic food category; this would reduce the level of prices for those products, which would in turn pull down prices for competing products in the same category.
The Council argued that removal of price controls from basic dairy items in 2006 caused a sharp increase in prices, and took place despite the recommendations of a consulting firm, whose findings were even hidden from the Government at the time.
The Council submitted to the Ministry of Industry, Trade and Labor a professional report by Applied Economics, recommending tests and principles relating to the issue of price control and its removal.
Council CEO, Adv. Ehud Peleg, called on the Committee to recommend the establishment of an inter-departmental team to monitor price levels, and which could recommend corrective measures where necessary.
This is the necessary answer – adds the Council’s CEO – to the lack of response by the Government to the ongoing information about price increases coming in since 2006; he added that such a team also had to include a representative of the Consumer Council, to ensure that consumers would have an influential voice.
The Council also called on the Committee to recommend the imposition of controls on marketing margins for fruit and vegetables, in order to stop the insufferable situation in which the majority of the high price for fruits and vegetables actually goes to line the pockets of middlemen and marketers, at the expense of the farmer, who only receives cents for his produce, and the consumer, who pays a fortune for it.
The Consumer Council asked the Committee to also deal with price gaps existing between major metropolitan and outlying areas, which did not earn a significant mention in the Committee’s report. It is totally wrong for businesses to exploit the disadvantaged position of consumers living in outlying areas, where there is no competition, by charging much higher prices than those charged in major population centers.
At the end of his appearance in front of the Kedmi Committee, Adv. Peleg made an extraordinary request of the committee members. He asked that they recommend a conceptual change in training programs in Economics and Business Administration, so that the consumer – at the end of the “value chain” – should not be forgotten, and that the centrality of values such as fairness, consideration and social sensitivity should be emphasized, alongside the principle of profit maximization, which is sometimes considered the be all and end all of these subjects.
The Consumer Council’s CEO mentioned that it is these programs that produce many of the country’s businessmen, as well as the economists in government departments, and that a cultural change in the commercial life of the country has to start first with their educational frameworks.
* The Kedmi Committee is an interdepartmental committee established to examine the level of competitiveness in the food and consumer goods industries.
The committee, named for its chairman, Sharon Kedmi, who is director-general of the Ministry of Industry, Trade and Labor, was established in 2011 by the Ministers of Finance and Industry, Trade and Labor following protests over the price of cottage cheese (and other basic foodstuffs), and was charged with examining the level of competitiveness within various sectors of the food market in Israel. The committee also has a sub-committee dealing specifically with the milk industry in Israel.