Israel Seeks to Ease Toiletry Imports in Attempt to Bring Down Prices

Importers will no longer be required to receive advanced permits from the Health Ministry nor present documents indicating their full supply chain

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A pharmacy in Petah Tikva, 2017.
A pharmacy in Petah Tikva, 2017. Credit: Ofer Vaknin

In an about-face, Israel’s Health Ministry is poised to permit nearly unimpeded import of toiletries.

A new document listing principles of toiletry imports does away with current regulations requiring importers to receive advance import permits from the Health Ministry. The document was drafted by the Health Ministry, with the backing of the Prime Minister’s Office. Parallel importers will no longer have to present documents indicating their full supply chain, from production through the importer’s procurement, and import supply will not be limited to countries appearing on a white list.

Under the reform, producers and importers would be responsible for their own oversight.

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The reform is designed to drastically cut the price of toiletries and other goods, including shampoo, conditioner, toothpaste and baby care products.

This model is based on the Swiss model, which places complete trust in importers and manufacturers to conduct their own safety testing.

The main losers will be official importers, who would take a hit to their profitability and standing. They are expected to fight against the reform.

One industry player, Adam Friedler, a partner in the Gur Pharm pharmacy chain owned by discount supermarket giant Rami Levy Shivuk Hashikma, called the reform “the biggest revolution ever in Israel’s commodities market.” He said it would enable him to import Axe deodorant from abroad for $0.80 per stick and sell it for 5-6 shekels apiece, which is less than half its current price in Israel, or to import tubes of Colgate toothpaste for $0.30, instead of paying the official importer’s current price of 7 shekels before VAT.

Furthermore, the more lenient approach to parallel importers would give stores more leverage versus the official importers.

High prices on toiletries has been a source of consumer discontent in Israel. A previous reform designed to shame pharmacies into lowering prices required them to list the price of goods in foreign countries alongside the local price.

Until now, Israel’s Health Ministry has mandated that it approve all toiletry imports, instead of delegating the last to importers. The approach partially stems from the trauma of the Remedia affair of 2003, when imported Remedia formula missing vitamin B1 killed four babies and caused irreversible damage to dozens more. That affair led to charges against Health Ministry officials who failed to flag the formula’s deficiency.

Meirav Arlosoroff contributed to this report.

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