Four years ago something big happened in Israel - the Knesset ratified the price tag law, drawing howls of agony from the big manufacturers and retail chains.
Until then, these people marked up prices in unintelligible codes and the consumer couldn't tell cheap from dear. He couldn't know the price of each product; she couldn't tell what was a bargain and what was too expensive. All of this brought joy to the retail chains and manufacturers as they exploited the situation and the customers with consecutive price hikes.
As soon as the law was ratified, the retail chains had to start putting price tags on every product, and a new era had begun. The consumer began to learn and compare - scrutinize the price of each product, comparison shop.
No longer could manufacturers raise prices left, right and center without the consumers taking note and taking their custom elsewhere. Consumer price tracking and comparison shopping led to increased market awareness, something that greatly contributed to curbing inflation from 1999 to 2001.
The retail chains did not like the legal change that hurt their profitability - even less did they like the scorching fines for breaking the law. In mid-April this year, Blue Square Israel (TASE: BSI) was fined NIS 500,000 for misleading consumers, plus a NIS 400 personal fine on the managers of each branch found to be in violation.
The legal standing of the retail chains and their managers worsened recently when the issue was transferred to the consumer protection law, which is much tougher on delinquents. Under a law that went into effect on June 12, chain managers can be tried and fined up to NIS 50,000, and fines on the chains themselves can soar into the hundreds of thousands of shekels.
However, for four years the retail chains and manufacturers have not given up their determined efforts to try traveling backward in time. This week they were scheduled to meet deputy industry and trade minister Eli Ben-Menachem to try to convince him to try another pricing method, and they want him to kindly allow them to run a trial at a few branches. This was a trap they had set for Ben-Menachem, because after the system had been installed in the trial branches, it would have been impossible to remove because of the costs involved. Through this small crack in space, they hoped to continue rattling the price tag system until they managed to drag us all back in time.
But Ben-Menachem, who has proved himself an able defender of the consumer, didn't fall for it and he canceled the meeting with the retail chain managers, scheduled for yesterday No one understands better than he that the present price tag system is good for the consumer. It is particularly good for the poorer classes and new immigrants.
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