Shufersal scandal highlights problems with pricing practices – editorial

It has been a difficult few weeks for Israeli supermarket chains in general, and for Shufersal in particular.

It started with a recent news report on Channel 12 that found that the products on Shufersal’s online site catering to the Haredi public, Shufersal Mehadrin Direct, were significantly cheaper than the same products offered on the Shufersal’s “regular” website. Supermarket. Prices for some 2,000 identical items were 10-20% cheaper for those living in ultra-Orthodox neighborhoods like Bnei Brak, where there were deliveries, than for those living in other parts of the country not served by the mehadrin site.

Following a public outcry, Shufersal did not cut item prices universally, unsurprisingly, it simply suspended the discount website.

If that wasn’t a big enough headache for the chain, with some promising to boycott their stores due to their discriminatory policies (why should they charge the Haredim less for toothpaste and frozen salmon than the rest of the world? population?), On Tuesday, the Contest Authority raided Shufersal’s offices and questioned its CEO about the alleged price collusion.

But this time Shufersal was not alone, as the Strauss Group offices were also raided, with its executives also called in for questioning, along with officials from the Victory supermarket chain, food importer Diplomat Holding, and Rami Levy, the owner. of the food market chain that bears his name. Levy was expelled from a meeting of the Knesset Economics Committee on Wednesday that discussed increasing competitiveness in the food industry.

Pizza on Shufersal’s site for NIS 21.9 and Yashir L’Mehadrin’s site for NIS 15.90, a difference of 31% (credit: screenshot)

According to the pricing allegations, supermarket owners signaled to each other that it was time to raise prices by giving interviews in recent weeks warning of impending price increases. If a supermarket executive says price increases are coming, according to this collusion theory, he is essentially telling his competitors to go ahead and raise their prices as well.

For the consumer, the spectrum of higher food prices, in addition to already exorbitant house prices and recent increases in gasoline prices, is a stinging blow.

For this government, however, it could represent an opportunity, an issue that can unite all elements of the disparate coalition. Yamina, Meretz, Ra’am and New Hope may not agree on the Palestinian issue, politics towards the Negev or how to deal with Gaza, but they can all agree on the need to reduce the country’s cost of living. .

While it may not be as sexy a topic as peace with the Palestinians, if the government aggressively adopts deep-rooted practices that drive up the prices of everyday items in Israel, you may have found your inherited problem. And this administration needs a legacy issue after last week’s budget approval, as the twin goals that defined this coalition from the start: to sideline Benjamin Netanyahu and pass a budget to ensure a modicum of stability policy, they have already been achieved.

One of Israel’s many anomalies has been the degree to which economic issues have rarely dominated the country’s agenda, always outstripped by issues of war and peace. Bill Clinton’s famous campaign battle cry “It’s the economy, stupid” never resonated here.

But a combination of factors could come together now to change that.

The first is that on the security front, things are relatively quiet right now. Although that could change, there is currently no major crisis in Gaza or the West Bank, a situation that allows other issues to take center stage, one of which is the cost of living.

Second, the ideological differences that separate the eight coalition parties will prevent them from addressing issues that have long dominated political discourse: the settlements, Jerusalem and the Palestinians. The parties cannot agree on these issues, so to be successful they will need to focus on the issues that they agree on. Stopping the big food conglomerates from teaming up to increase your profits is an easy goal. All parties can agree and the audience will applaud.

The stars have briefly aligned to allow the government to address an issue that affects the lives of all Israelis. But you must act quickly and decisively before another crisis hits the earth and makes the prices of toothpaste and frozen salmon seem inconsequential again.

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