Honey costs 350% more than in U.S.
Blame concentration, says expert; figures a lie, says Honey Board.
Honey in Israel costs a fraction of the price of honey in the United States and Britain, for which shoppers can thank the absence of competition, says the Jerusalem Institute for Market Studies.
Right in time for Rosh Hashanah, the institute published a paper claiming that honey sells for an average of NIS 6 per 350-gram jar in the United States, which is 28% of the average price in Israel. Here honey costs NIS 21 per 350-gram jar on average. In marketing chains in central Israel, a 350-gram jar of honey sells for an average of NIS 30.
However, the Israel Honey Production and Marketing Board claims that the figures in the report are wrong and untruthful.
In Britain, honey costs half the price in Israel: an average of 2.1 euros per 350 grams, which is NIS 10.70, says the institute. But British honey can be found for as little as 16% of the price in Israel.
"About 40% of the Israel's honey consumption is during the Tishri holidays, mainly Rosh Hashanah," said Keren Harel-Harari, an economist at the Jerusalem Institute. "About 1,500 tons gets consumed in that month, worth about NIS 600 million. The average Israeli consumes about 300 grams of honey during the Tishri holidays, on average."
The reason honey prices are so high in Israel is the same reason milk and cheese cost so much here, she says: big markups by the retailers, compared with the price they pay the suppliers. And that, she says, is because of ill-thought government policy and overconcentration in the honey industry.
Two-thirds of the price of honey is marketing margins, says the Israel Honey Board, adding that the high Customs levy on honey make importing impractical. The levy on a 350-gram jar of honey is NIS 17, which is 255% of the price of the honey. The Customs fee on honey is the highest among all foodstuffs, says the Honey Board.
Honey imported from Canada, Mexico, Argentina and China costs between NIS 5.69 and NIS 6.29 per 350-gram jar, a third of the price of Israeli honey. But, says Harel-Harari, the Honey Board doles out exemptions from Customs only to the strongest bodies in the sector, strengthening their monopolistic edge and leaving out small honey farmers.
Yad Mordechai controls more than 50% of the market, Harel-Harari says. The company is owned by the Kibbutz Yad Mordechai and Strauss Group (which is reportedly negotiating to sell its coffee business - see Page 8 ).
The Jerusalem Institute recommends that quotas on imported honey be eliminated, to increase imports and while about it, it recommends that Israel import from more countries. The institute also urges that the government look into why the Honey Board is, allegedly, giving its quota of Customs exemptions to the strongest bodies.
However, the Food Committee, an arm of the Ministry of Industry, Trade and Labor, does not recommend lowering Customs levies on honey. Nor does the ministry support lowering import duties on other "fresh" agricultural produce items including olive oil, or fresh fruit and vegetables. It has, however, agreed to lower Customs on imports of mutton and lamb, beef and fish.
The Honey Board commented in response that the study is completely wrong: It "contains erroneous and mendacious numbers." The board will be investigating who stands behind the report, which had evidently been commissioned by interested parties, it said.
The board added that it may take legal action against the Jerusalem Institute for Market Studies based on its untruthful report. The Honey Board claims a 350-gram jar of honey costs NIS 15.50 in the U.S., not NIS 6 as the Jerusalem Institute claims.
Israel imports 780 tons of honey free of Customs each year, says the Honey Board. Of that, 280 tons is allocated by lottery among all honey marketers, the board says. The board adds that unlimited amounts of honey can be brought in at a discount Customs rate of NIS 2.25 per kilo.
"The price of honey is determined by the marketing chains, not the producers, while the study ostensibly shows that the manufacturers are to blame for the prices," said the Honey Board. Opening the market to imports will flood Israel with cheap honey of inferior quality, it says, adding that the U.S. has banned Chinese honey imports.
The Jerusalem Institute rebutted that it is an independent body that takes money from nobody in the sector. There are price differences between marketers, it said, but the price the board cites - NIS 15 per jar - is lower than the average price of honey in Israel.