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The King is Naked! / Adv. Ehud Peleg

The advent of “Cofix”, the new takeaway café on Ibn Gvirol Street in Tel Aviv, has drawn attention to the concept, which some say represents the nature of a free market economy, while others see it as piggish capitalism: "maximizing profits".

The NIS 5 cup of coffee (to which a pastry has now been added at a similar price) is new competition for traditional coffee shops that charge NIS 12-14 for that same cup of coffee, and shows that there is another way.

True, a sit-down café has additional costs ‒ a kitchen, added space and more staff. But does this difference justify the huge price gap? The reduced price of coffee that is now spreading through different coffee-shop chains is probably an indication that the high prices were unreasonable. This was more of an attempt on the part of café owners to exploit the desire of consumers to find a sitting or meeting place outside their homes or offices, knowing that consumer protection mechanisms – preliminary checks and price comparison ‒ will not work in this case.

Proponents of the market economy will possibly view this as a legitimate action while identifying a business opportunity.

However, it looks like someone took advantage of the consumer constraint by charging unnecessarily high prices, and this leaves a bitter taste in terms of how some of the business firms perceive consumers.

In this context it seems that there are two types of business people: those who see the consumer as a partner in the profit-making process and treat him with appropriate fairness and those who think that if they don’t “milk” every possible profit from the consumer, they risk being perceived as “losers” and failing in business.

The fear of being perceived as a “loser” has long been considered a characteristic national trait in Israel. Even if we don’t relate to that as a scientific finding, we must admit that too many of us are motivated by this fear, which we perceive as the height of humiliation and a damaging blow to our pride.

No one likes to feel exploited. But there are those who give it far-reaching implications:"If I don’t profit from anyone I can, whenever I can, people will say I’m a loser."

In commercial life, consumers personally experience the consequences of this extreme approach on a daily basis.

This approach is, at best, fed by fear, insecurity and poor self-image; in the worst case ‒ by greed, alienation and immorality. In both cases, the approach is distorted, so that the whole country is actually tarnished by unfairness.
Someone should have stood up to it long ago and denounced it.

Recently, this seems to be happening.

The Knesset is currently discussing an exceptional amendment to the Consumer Protection Law that will define unfair trade practices and rule them as an offense.

The Israel Consumer Council together with the Economics and Research Department at the Ministry of Economics is developing a fairness index that will examine and measure the conduct of commercial branches, businesses and companies, and make it publicly known.

The outgoing Director General of the Ministry of Education responded to the request of the Israel Consumer Council and announced that the Ministry’s central theme for the 2014 International Consumer Day would be "Education for Fairness".

And "Cofix", having set the price of coffee at NIS 5 and shown that there is economic feasibility for a business that is run in accordance with a fair profits policy, has challenged the “maximizing profits" approach, showing that "The king is naked!"

"Cofix", consumers raise their cup of coffee to your health!


* The writer is the CEO of the Israel Consumer Council

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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...