"It really has to be checked why the prices of imported products are so much higher in Israel than they are abroad," said Bank of Israel Governor Stanley Fischer yesterday at a special press conference convened because of the social unrest.
How right he is!
A month ago, I was preparing my car for its annual roadworthy test. An hour after I'd handed it over to my mechanic, he called. "You have to replace the right koploong," he said.
I did? "What is a koploong?" I inquired. "And how much will it cost me?"
"NIS 780 before VAT, not including labor," he said, and hastened to add, "Your car won't pass the test without it."
I approved the job, of course. What were my choices? I'm not about to drive around in a car that can't pass the test and isn't legal. When I went to pick up the beast, I asked the deputy manager of the garage, "Tell me, there isn't really such a thing as a koploong, is there? You made it up. Am I right?"
"You are not," he said, looking hurt, and handed over the printout of my bill. He pointed at the computer. "It's from the computer. It's all in there. You can check."
I decided to do that very thing and sat down at their PC, which may have been filthy but was also connected to Internet. I entered the catalog number of the "koploong."
Quickly enough I elucidated that the mysterious part was a coupling shaft. I then entered that into Google and within three seconds had found a site offering new, original spare parts. It suggested that I buy a coupling shaft from Britain for 31 pounds.
That works out to NIS 174. Here in south Tel Aviv the price was NIS 780. That's a difference of 400% at my expense.
I showed the figures to the garage manager and asked why it was so expensive at his fine establishment. "Because that's what the importer charges me," he said. "That's how it is, spare parts are expensive in Israel."
I didn't believe a word he said but paid up like a good little boy and left. The koploong cost me NIS 780, but for my money I could answer Prof. Fischer's question about why imported goods are so expensive here. Imports are expensive because of structural barriers such as pointless bureaucracy of bodies like the Standards Institute, uncompetitiveness, and because it suits everybody except, of course, the end client.
It seems that just about every market in Israel is in the hands of a few people or companies that conspire to keep prices sky high. The importer charges the earth for a product and makes a fortune, because he has no competition over spare parts. The official garage of the importer charges a vast margin on top of that and there may well be another broker in the middle. Why doesn't the garage simply start importing parts and selling them more cheaply? Answer: Why should he?
One thing I can say: the garage told me to buy the koploong for that price, and that was that. No alternatives.
There's another reason prices are so high: Israelis are suckers.
El Al pilots have a penchant for kicky cars and they have the drill down pat. Baby needs a part? They buy it abroad for a fraction of the price.
Maybe the answer to the sky-high cost of imported products is to lower the price of air tickets to a level where it pays to fly to Britain to buy a koplong for your car. It will surely be more fun than arguing with the warehouse manager of a garage in south Tel Aviv.
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