Business in Brief

New-car deliveries jumped in April amid concern about tax increase

With new taxes about to drive most new car prices up and industry reforms set to knock them right back down, edgy consumers preferred leaving nothing to chance, snapping up 17,276 vehicles in April, an increase of 20% over the same month last year. New cars sold in the first four months of the year were up a modest 1.4% compared to the same period the year before. Korean makers Hyundai and Kia topped the list with 12,529 and 6,872 deliveries respectively, followed by Toyota with 6,363 and Ford with 5,726. Luxury car sales have been brisk as the Finance Ministry hatches plans to slap higher taxes on these too. Meanwhile Transportation Minister Yisrael Katz this week called for a boycott on dealerships until prices come down 20%. ‏(Daniel Schmil‏)

HP countersues ECI Telecom

HP, the giant U.S.-based information technology company, disclosed yesterday that it is launching a NIS 23 million countersuit against ECI Telecom for nonpayment of money owed on a project to establish a cloud-based computer center. The suit comes a month after ECI went to court seeking NIS 38.4 million from HP in damages for failing to complete the project to specifications, asserting that it hadn’t met any of the eight project milestones agreed upon on time and has managed to supply no more than 20% of the services it had contracted to perform. ‏(Orr Hirschauge‏)

Mega pulls StarKist tuna off shelves in price dispute

The Mega Bool supermarket chain has stopped carrying StarKist, the top-selling brand of tuna in Israel, after the importer raised the price to retailers by another 9% last month. At the beginning of 2012, StarKist’s Israel distributor, Diplomat, raised the price by 10%, claiming the hike reflected higher tuna prices around the world. This isn’t the first time StarKist has battled with supermarket chains over prices and been taken off the shelves. Last June, Super-Sol took the unusual step of announcing that it wouldn’t allow suppliers to raise tuna prices. Last year’s tuna crisis even reached the Rami Levy stores when the chain refused to allow Williger, the country’s second top-selling brand of tuna, to raise its prices, creating a shortage. The top two brands account for 70% of all retail sales of the fish. ‏(Ido Efrati‏)
 

Study: 70% of Haredim who do army service enter labor force

A study released yesterday by the Economics Ministry’s research division found that 70% of Haredim who served in the Israel Defense Forces’ Shahar program entered the labor force after completing their service. The study, carried out in 2011 and 2012 among 270 men who served in the program, specially designed for ultra-Orthodox recruits, noted that their rate of employment before enlisting was 34%. It also found that they earned an average monthly wage of NIS 6,250 before taxes and that 26% were employed in banking and financial services, as opposed to just 7.5% before their enlistment. ‏The study comes as a government panel seeks to design a program for drafting Haredi men. (Hila Weissberg‏)

New 6% duty on apparel could cost consumers

The Finance Ministry’s decision this week to impose a 6% duty on apparel will cost consumers NIS 600 million a year, Solly Sakal, principal of the Sakal Group, said yesterday. But David Cohen, an executive at Hamashbir, said competition would prevent retailers from passing the entire increase on to customers. “We have no intention of touching shelf prices. Even if suppliers raise their prices, we’ll absorb it,” he said. Micha Ronen, CEO of the retailer Honigman, said the duty was pointless. “The protection that such a move will provide to local production is marginal. Israel’s textile industry has been almost non-existent.” The duty was imposed after briefly being cut to nil, but pressure from fabric importers and local clothing manufacturers caused the treasury to impose a 6% duty for both clothing and its raw materials. ‏(Ido Efrati‏)

Limor Edri