The steak tax and the fish levy
In banking there are only two or three major competitors, and so service charges are sky-high. In the capital market we pay the highest management costs in the world for trust funds that deal in stocks.
Although cottage cheese was the star this week, and the dairy industry is undeniably the prime example of a planned, cartel economy, which benefits from blocks to imports and charges extravagantly, this is but one example of many in the economy's distorted structure.
Consider an entirely different industry - the seaports. The story's different, but the result is identical: inflated prices. A reform in the ports was supposed to lead to competition, streamlining and privatization, but nothing happened. The workers' committees are still in control, there's no privatization on the horizon, and we paying for that with high prices.
Three months ago, the Finance Ministry discovered that the ports management distributes a "steak incentive" to the workers, coupons for restaurant meals. Wages director Ilan Levine ordered an end to that, and got work stoppages and ships being unloaded at a snail's pace. Is it any wonder that the cost of loading and unloading in Israeli ports is the highest in the world? Is it any wonder this cost affects the price of all products in the market? Let's call it the "steak tax."
In 2008, the government decided to move fish farms for denise (sea bream ) from the Gulf of Eilat to an area near the Ashdod Port but not belonging to the port. The port workers demanded a slice of the fish business in the shape of four work slots. Ardag and Dag-Suf said they had no need for port workers, but the companies were to pay for "phantom workers," to ensure there would be no trouble with port workers. Is it any wonder that denise is worth its weight in gold? Let's call it the "denise levy."
Three months ago, the head of the Ashkelon port works committee, Alon Hassan, celebrated his son's bar mitzvah, and all the port workers were invited to the hall; the gates of the port were closed for four whole hours. Trucks waited, and ships were not unloaded. That was the bar mitzvah present from the Jewish people to Hassan.
It's not only the ports. In banking there are only two or three major competitors, and so service charges are sky-high. In the capital market we pay the highest management costs in the world for trust funds that deal in stocks. The same is true of cell phones, fuel, and marketing chains. The cement monopoly bars competitive imports, and flight services are very expensive because of the monopoly of the Airports Authority.
In the food industry there are in effect four major manufacturers: Tnuva, Strauss, Osem and Unilever, without whom no marketing chain can manage. Therefore, they can play with the prices. Should a small manufacturer try to enter a supermarket, he will face considerable abuse. He will have to shell out and help fund the chain's "advertising and sales promotion." If he dares to introduce a new product, he must pay a fine called "an introductory discount" - all of which increases expenses and raise prices.
This week, there was a lot of talk about the very high duties for imported dairy products. But there are high duties on numerous food products - 190 percent on the import of fresh beef, and 170 percent on the import of fresh chicken. The duty for importing honey is 250 percent. For potatoes it's 230 percent. For fresh garlic the duty is NIS 8.9 per kilogram. For fresh olives 120 percent; for shelled almonds 100 percent; for olive oil NIS 4.84 per kilogram; for canned tuna 12 percent plus NIS 3.45 per kilogram. Is it any wonder prices are so high if competitive imports are blocked?
Let's not forget to add the cost of kashrut, which makes everything more expensive, high taxes, the murderous property tax for businesses, and the general uncertainty, which also contributes to high prices.
Not only cottage cheese is to blame. Everyone is making a laughing stock of the Israeli consumer.