Yesterday, Industry Minister Ehud Olmert attended a session of the Knesset Finance Committee and joined in its debate on the price of bread. He took the opportunity to lash out at his critics over price labels on food items, in his usual vulgar manner. Olmert is angry because he did not expect such ferocious public opposition. He thought he could sit quietly with his pals from the food and retail sector and that together, they could wipe out the greatest achievement for the Israeli consumer - individual item pricing. But the nasty media unwrapped the whole trick, and this makes the job all that much harder.
The director-general of his ministry, Ra'anan Dinor, was interviewed in Haaretz (Hebrew edition) yesterday and showed his astonishing ignorance of economics, pricing and the remit of his job. Dinor said that the retailers wanted to cancel the pricing requirement because it "was difficult for them."
Well, that breaks my heart. And what about the millions of consumers for whom item pricing is the elixir of life? Is it the director-general's job to conjure up profits for the tycoons, or to worry about the public's welfare?
A founding principal of competition is full and timely information. Therefore, the purchasing public must know the price at four points - the point of sale, while the item is still in the cart (so it can be compared to other products in the store); at the till (to make sure the supermarket doesn't pull a fast one); and at home (so you can compare prices with the same product bought elsewhere or the identical product from an earlier purchase). If these conditions are not fulfilled, the information is incomplete, competition suffers, and the manufacturers and food retailers can then raise their prices - and that's what they're after. But those who haven't sat in on even one hour of economics classes (minister or director-general) cannot know the very basics of market economics.
The electronic alternative that the retail chains are proposing has certain "advantages." They can manipulate prices, update them quickly, even set temporarily high prices; and all for one purpose - driving up profits.
In the United States and most of Europe, there is full item pricing - if not by virtue of the law, then by force of habit, or the power of the consumer. But in the countries that don't have it, consumer protection councils have to fight to establish it (and they have Olmerts of their own).
So there's nothing left to do but to cheer on those consumer councils fighting the decree, to congratulate Netanyahu who has spoken out against the deceitful proposal, to encourage the treasury's budgets department, which opposes the pricing cancelation, and to applaud those many citizens who have written to Olmert in protest. And a special mention is in order for Shalom Simhon, chairman of the Knesset Economics Committee, who recently voiced his support for consumer protection and who may one day be the last obstacle standing before Olmert.
I shudder to think that Olmert was almost made finance minister. Prime Minister Sharon had promised him either that or the Foreign Ministry. Just imagine to what depths the public would have sunk, at the expense of the few magnates. (Look at his decisions on cement, communications, land and Coca Cola). How lucky we are that Sharon is the type who doesn't always keep his promises.
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