Supermarkets accused of keeping fruit prices sky high
The retail supermarket chains have been accused of keeping prices high and making vast profit margins on the sale of fruit and vegetables, despite the current surplus in the market.
The retail supermarket chains have been accused of keeping prices high and making vast profit margins on the sale of fruit and vegetables, despite the current surplus in the market. "The market is overflowing due to the excess harvest of fruit and vegetables," said Tal Dershowitz of the Fresh Produce Council, "but most of the retail chains have not adjusted their prices accordingly."
Summer fruits such as peaches are selling at prices of around NIS 5 per kilo, despite the wholesale price having fallen to around NIS 1.60 a kilo.
Michael Eilon, chairman of the new council's establishment committee went so far as to accuse the chains of selling fresh produce at prices up to 300 percent higher than the price they pay the farmers. Ultimately the farmers and the consumer public are carrying the costs.
Although there has been a slight drop in prices of fresh produce, the margins between the wholesale and retail prices are still high, but following reports in the press the chains have reacted. Yesterday Clubmarket's Jumbo chain was selling tomatoes and cucumbers at the wholesale price of 99 agorot a kilo. At Blue Square's Mega stores, discounts on fresh produce was available but only for those purchasing more than NIS 150 worth of goods.
Agriculture Minister Yisrael Katz agreed that following reports from both his ministry and the Fresh Produce Council, prices had fallen, at least partly. However, the minister noted that the large retailers had told their suppliers that any drop in price for the produce would be reflected too in the price they paid the farmers. This was clearly evidence that the large retailers were illegally acting as a cartel.
Some retailers had coordinated their prices among themselves, and refused to bring the prices down to reflect the surplus in the market, had turned to the farmers collectively on the same day and told them to lower their prices. "There is coordination between them and this is a forbidden coordination," said Katz.
The minister stressed that the ministry and the council had had no choice but to publicize the matter as there was no other way of increasing demand by the public, which would have bought up the surplus.
The large retail chains contend, however, that they do not buy their fruit and vegetables in the wholesale market but rather they reach agreements with the farmers themselves at the start of the season, and that therefore these claims of keeping margins very high were false. Despite these claims, the large chains - Supersol, Blue Square and Clubmarket - all refused to comment for this report.
And more to waste
Zvi Zrahiya adds: The six week closure of the Karni crossing into Gaza has cost farmers NIS 45 million and industrialists NIS 15 million, according to figures released during a Knesset Finance Committee meeting yesterday. Palestinians have responded to the closure by banning imports from Israel, leading to excess produce and causing a 60 percent price slide. As a result, farmers have destroyed 7,000 tons of summer fruit.
The continued closure could also kill the Kitan factory in Dimona, which is running behind its supply schedule for American clients, Avshalom Herzog of Moshav Almagor said yesterday. Committee chair Shalom Simhon (Labor) accused the government of a Chelm-like, insensitive policy.