Consumer Affairs The High Cost of Allergies

People with celiac disease or milk allergies pay double or triple for basic food products. In other countries, the state provides financial help - but not in Israel.

Four years ago, A. discovered he has celiac disease. He had to give up the bourekas, pasta and cakes he was accustomed to eating and replace them with gluten-free products. To his surprise, A. discovered his shopping bill had risen by hundreds of percent.

Celiacs can't tolerate gluten, a protein found in wheat, barley, rye and oats. There are currently about 25,000 people in Israel who have been diagnosed with celiac disease.

Gluten, Lactose intollerance, allergy, food, supermarket
Ofer Vaknin

Gluten-free products are estimated to increase the cost of the monthly shopping bill by more than NIS 200 per person. The high prices are due mainly to the technology and separate work environment needed to produce gluten-free food, as well as the small quantities, since the market is relatively small.

Currently, the Health Ministry subsidizes only one gluten-free product: a flour called Conditor produced by the Galam company, which can be purchased at all the supermarket chains and is about the same price as regular flour. In recent years, the ministry has spent about NIS 600,000 annually on subsidizing this flour.

In other countries, including Ireland, Britain, Italy, France, Austria, New Zealand and Canada, celiac suffers are given help in various ways - through the tax system, product subsidies and monetary allowances or reimbursements. But in Israel, families bear the burden on their own.

With the exception of the flour, gluten-free products are significantly more expensive than similar products that contain gluten: TheMarker found differences of up to 267% (in price per 100 grams ). Thus, for example, the price of a packet of ordinary bread crumbs is NIS 4.50 for 200 grams, while the price of the least expensive packet of gluten-free bread crumbs we found is NIS 16.5 for 250 grams.

The price of Berman's sliced white bread (750 grams ) is NIS 7.80, but celiac sufferers have to pay NIS 21 for a loaf of gluten-free white bread (620 grams ) - 225% more. Telma breakfast cereals (750 grams ) sell for NIS 17.50, but a smaller quantity (500 grams ) of the gluten-free equivalent costs NIS 26.90, 131% more. Moreover, relatively few products are available for celiacs, whereas the supply of regular products is large, including house brands and discount-chain products - which only increases the price gap.

Paying more for milk, too

Celiacs are not the only people whose food allergies result in higher shopping bills. About 0.5% of the population is allergic to milk and must therefore purchase substitutes that cost dozens of percent more. Michal Langberg, a clinical dietitian who is also the mother of an allergic child, stressed that a milk allergy is not the same as lactose intolerance. Most of the population has some degree of lactose sensitivity, she noted, but those who are allergic are completely unable to tolerate the milk protein.

"This allergy is severe, and is liable to be life-threatening," explained Langberg, who is also active in Yahel, an association of people with food allergies. "The assumption is that in 80% of cases, the allergy goes away after the age of five." But until it does, parents of children who are allergic to milk must be constantly on guard: Any playmate who eats chocolate could be their death.

"My child never goes into restaurants, because you can never know what traces remain on the tray from the previous serving, even if the item is pareve (containing neither meat nor milk )," said Tali, the mother of four-year-old Eidan. "Many products that supposedly do not contain milk are produced on a dairy production line, and therefore he is not allowed them. "We put him into nursery school only at the age of three, and for the first month and a half, we sat with him there until 10:30 A.M., when they finished breakfast. The teachers who run the place are religious women - they have separate sinks [for meat and dairy dishes] - and they adapted the nursery school to his needs: He eats his breakfast on meat plates and is under constant observation."

Eidan goes to birthday parties with a bag of candy from home, and the parents almost always volunteer to bake risk-free cakes and cookies. "This is volunteering that is actually an obligation - I have to be certain about the food he eats and the work environment in which it is produced," Tali said. "It's hard to complain about the monetary loss that goes along with this; when it comes to your child's health, you are prepared for any expense. We do keep dairy products at home, but the refrigerator is organized in such a way that anything that might spill will not be on the top shelf."

Clinical dietitian Tzahi Canaan noted that "in Israel, people who are allergic to milk are at an advantage, because keeping kosher [which entails separating milk and meat products] prevents dairy products from being mixed with other products. A product approved by the Badatz [an ultra-Orthodox kashrut certification organization] is examined with nearly the same scrupulousness as that applied by the parent of an allergic child."

"It must be recalled," added Langberg, "that in addition to avoidance, it is necessary to consume calcium from another source - for example, calcium-enriched soy milk and soy puddings, raw sesame or tofu."

Such products cost up to 155% more. Thus, for example, a price-controlled one-liter bag of milk costs NIS 4.70, while soy milk costs NIS 12 - nearly three times as much. The popular Hashahar chocolate spread costs NIS 11 for 500 grams, while a comparable spread for those allergic to milk costs NIS 2.50 more for 400 grams. Per 100 grams, the price differential is 53%.

A soy pudding cup costs 72% more than a regular individual pudding cup, which is expensive in any case. Thus, for example, a package of eight cups of Dany milk pudding (125 grams ) is priced at NIS 16.30, or NIS 2.00 for a single cup, whereas a package of four cups of soy pudding costs NIS 19.50, or NIS 4.90 for a single cup.

The price of plant-based baby formula (400 grams ) is more expensive than dairy formula; the gap can be as much as 15 percent, depending on where it is purchased. And dairy Materna is also sold in economy packages of 700 grams, which means the price differential per 100 grams can soar to 46%.

For Eidan's parents, this is a significant differential. "We still have to give him a certain amount of plant-based formula every day to supplement his calcium," Tali said.

But Canaan noted that milk and dairy products are not only a source of calcium: "Milk serves as a source of protein, in addition to meat, fish and legumes. When nutrition in a home has been based on dairy products, there is a need for many changes, and additional expenditure that is hard to calculate."

High production costs

What is the source of these price differentials? At a meeting of the Knesset's Labor, Welfare and Health Committee about two months ago, the owner of a leading producer of gluten-free breads explained that in preparing dough, gluten serves as an adhesive. Thus without it, producers need to use many substitutes, which increase production costs.

"We are currently working one shift," he said, "and we produce on average about 30,000 products a month" - meaning 30,000 units of 40 different products.

According to the manufacturer's figures, the production cost of a loaf of gluten-free bread is NIS 8.60 and the producer's profit margin is NIS 1.24 per loaf.

"In addition, there are many other costs," he said. "There is the distributor, but since there is not a lot of demand, they go to the point of sale once every two weeks. This means the bread is not fresh; it is kept frozen. And cold transportation is more expensive by 25%.

"Health stores multiply the cost price by 1.6," he added, "and that is how they arrive at the recommended price for the customer, including VAT" - which is NIS 21.

Telma said the production of a gluten-free breakfast cereal involves outsourcing: The Israeli food company imports this product from Europe.

"A situation has developed here in which everyone is right," said Noam Rimon, proprietor of the Glutenfree Internet store. "NIS 20 for a package of pitas is a scandalous and unreasonable price, but there is no alternative. No one is giving grants and encouraging the growth of small producers of gluten-free products like those they give to a high-tech company that sets up shop in an outlying area. We don't operate like the marketing chains; with us, there is always someone else taking a 30% cut. I sell 600 packages of pita a month. If I had a supermarket serving 1,000 people a day, it would look different from a gluten-free warehouse serving 50 people a day."

Rakefet Sheffer, director of the Israeli Celiac Association, knows the situation here well. "Nobody in the market is getting rich at the expense of people with celiac disease," she said. "There is a real problem here, and the only way to solve it is with public assistance - both subsidies for gluten-free products and financial aid to sufferers. At a time when people are raising an outcry over the price of cottage cheese, there ought to be room to hear the cry of celiac sufferers, who have to pay an unreasonable price for bread."

In the case of milk allergies, the situation is a bit different: Moshe Wideberg, joint CEO of chocolate spread manufacturer Hashahar Ha'ole, said the high pricing is determined by the supermarket chains.

"We sell the supermarket chains a container of 400 grams of pareve chocolate at a price lower than that of half a kilogram of dairy spread," he said. "So in fact, our price for 100 grams of dairy spread and our price for 100 grams of pareve spread are identical. It is the chains that set the price. If the profit on regular spread is 10%, then the profit on pareve spread is 30%.

"The Hashahar dairy spread is a loss leader: It is a competitive product, and the store determines whether it is cheap or expensive. Therefore, the stores will very often run specials on the product in which they sell it at a loss - but not on the pareve product."

With regard to soy products, the manufacturers said that milk and soy are entirely different products, and therefore, their production costs are different.

Legislation in limbo

In recent years, several bills have been submitted to reduce the cost of purchasing gluten-free food products, but so far, none has passed. One, sponsored by MK Meir Sheetrit ‏(Kadima‏), would impose price controls on gluten-free bread, reimburse celiacs for specialized food purchases and give tax breaks to manufacturers of gluten-free foods.

Another, proposed by MKs Menachem Moses ‏(United Torah Judaism‏), Ori Orbach ‏(Habayit Hayehudi‏) and Ilan Ghilon ‏(New Movement-Meretz‏), sought to address the problem of the meager variety of foods on the market: It would obligate monopolies and leading food manufacturers to produce and market gluten-free products equivalent to no less than 5% of their annual sales. Currently, many large Israeli companies do produce gluten-free foodstuffs, but only for export, as marketing these products locally isn’t financially worth their while. Therefore, the bill would obligate such companies to increase their production in order to supply the demand for these products in Israel as well.

This bill passed its preliminary reading, but is now on ice, after the manufacturers promised to expand their supply of gluten-free products voluntarily, without legislation.

“The requirement was excessive,” said a highly placed source at one of the food companies. “The issue is coming to the Knesset because the association [Yahel] is doing its job well and arousing awareness, but the amount of gluten-free sales is tiny. It is impossible to flood the market with these products. They will not sell to the whole market: They taste different, and they are not the natural choice. Here in Israel, every product that captures shelf space has dozens of competitors − and therefore, we carefully choose the products with the most selling power.”

In September 2010, the Knesset Research and Information Center published a report analyzing the expected cost of government subsidies for gluten-free products. A monthly subsidy of NIS 200 to NIS 400 for about 30,000 celiac sufferers would cost the state NIS 144 million to NIS 172 million annually.

A cheaper solution, according to the report, would be to give a monthly benefit of NIS 200 to NIS 700 to families with celiac sufferers. Thus, for example, a monthly benefit of NIS 500 to between 7,000 and 17,300 potential families ‏(celiac disease has a genetic component‏) would cost the state NIS 42 million to NIS 104 million per year.

However, it is not clear whether the government will adopt the document’s proposals.
As for the cost of alternative foods for people who are allergic to milk, no solutions have been proposed as yet. According to Yahel director Shlomit Reder, “It is possible to count on one hand the number of parents who have managed to obtain a disability stipend for their children, who need constant supervision.”