Taking Stock / Whimpering watchdogs
Since when is the tourism minister a neurologist?
Avraham Hirchson is a politician blessed with many talents and interests. He has always loved to delve into as many issues as possible at once. But going by his resume on the Knesset Web site, he has no background in medicine in general or neurology in particular.
We took a look at his resume after learning, with surprise, that he deferred making a decision on allowing another Israeli airline to compete with El Al on the Tel Aviv-New York route, because of "the prime minister's health."
Naturally most of Israel is concerned about Sharon and hopes he gets better. But most of Israel gets up in the morning and goes to work as usual, and makes whatever decisions are necessary. What the devil do Sharon's synapses have to do with competition in Israel's aviation sector?
Hirchson is not the first government personality to avoid tough decisions on competition because of the massive pressure imposed by interested parties. A few minutes spent glancing at the business pages of the papers, over a couple of days, shows plenty of examples of the real disease afflicting our economy.
1. "Strauss-Elite to pay NIS 5 million ransom to settle Cadbury affair" (Maariv). A little company named Carmit had the gall to import Cadbury chocolate, in competition with Elite, and was brutally crushed by the giant.
As is their wont, the antitrust inspectors launched a highly publicized raid of Elite's offices and grilled its executives. But at the end of the day, the strategy worked for Elite. The company is so big that a NIS 5 million outlay is a blip in its finances. The message for the business sector is clear: devour the minnows and don't get caught. And, if you do get caught, pay a ransom; that's okay too.
2. "Supersol squabbling with Carmel Mizrahi: demands higher discounts, bonus" (Maariv). Don't the Carmel Mizrahi people read the papers? Couldn't you find somebody easier to tussle with? Don't you know Clubmarket went broke, that the trustbuster let Supersol buy it and that there's a new sheriff in Retailtown dictating the terms to the suppliers? By all means pick a fight, or pretend to, but at the end of the day you'll be toeing the line. This is a client responsible for 40 percent of your turnover. We know how this story will end.
3. "Most suppliers are terrified at the thought of Supersol merging with NewPharm" (TheMarker). Friends, drink a glass of cold water and calm down. Don't be terrified; the future is clear. Clubmarket's suppliers were just as depressed when they learned the bankrupt chain was going to be bought by Supersol, but they settled down soon enough. It's all happening by the book; the number of retail players is diminishing; competition is weakening and Supersol's power is rising.
4. "Cellular carriers, Bezeq hope to delay the mobility of phone numbers" (Yedioth Ahronoth). The companies are right: to let a user shift carrier, say from Pelephone to Partner, but keep his cellular number for the sake of his own convenience, is a disaster for the telecoms sector. It might make it easier for customers to jump ship and change their service provider when sick and tired of the inflated prices, the lousy service and mainly, the absence of proper disclosure, over which they do compete.
The companies are also right in once again protesting about the Communications Ministry's foot-dragging. The bureaucrats at the Communications Ministry and the Finance Ministry can make lightning-fast decisions when it comes to cutting allowances for old people, but when CEOs and corporate owners come knocking at their doors, that's a whole other matter. Why? Because one day they'll be looking for jobs at these companies run by these people, not by the disabled or the elderly living on government stipends.
There are maybe 20 other headlines from the last week alone that discuss regulation in Israel and the monopolies and cartels that trample their customers. But you get the point. Israel's disease is feeble competition and weak regulators who, at best, have no clear long-term strategy. At worst they don't want to have such a strategy, they want a cushy job after leaving government.
We shall wrap this up with a winner headline from Tuesday: "German regulators won't let Axel Springer buy ProSieben from Haim Saban and others." It would impair the freedom of information, the watchdogs explained; it would concentrate too much power and influence over public opinion in the hands of a single company.
How likely are we to read a story like that in Israel? Not very. In our little backwater, the people with the big money and big influence will always manage to gain more money and influence over the watchdogs. At best the watchdogs bark in the night. At worst they lick the reigning champion's boots.
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