The Israeli shopper not only pays more for imported food than his or her peers in Europe or North America, but even Israeli produce costs tens of percent more at home than it does abroad.
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Using the price comparison website mysupermarket.com, a survey conducted by TheMarker examined the cost of 25 products made in Israel and sold in Israel, Britain and the United States, and found double-digit percentage differences in prices.
Among the widest differentials was the popular candy bar Pesek Zman, made by Strauss, which cost 74% more at the Israeli discount chain Yaynot Bitan than at Tesco, Britain’s biggest supermarket chain. Osem’s packaged onion soup was priced 82% higher at Super-Sol – Israel’s biggest supermarket chain – than in British supermarkets. Wissotzky mint tea here was priced at 102% more than its selling price at Walmart in the United States.
A package of Osem vermicelli pasta in Israel sells for between 7.70 and 10.60 shekels ($2.20-$3), while in the U.K. it costs the equivalent of 6.80 shekels, the survey found. The highest price in Israel was at the Super-Sol chain, where the price was 68% higher than it was in Britain.
Packaging makes a difference, too. In the United States, Wissotzky Tea is sold in a large box, with six smaller packages containing 25 tea bags each, and sells for a total price equivalent of 56.30 shekels (about 9.40 shekels per 25 bags). In Israel, the same tea is sold only in single packages.
At the Rami Levy discount supermarket chain, the 25-bag package costs 11.80 shekels, while at the Mega chain it reaches 19 shekels, 102% higher than the per-package price in the United States.
Food industry executives trade charges about who is responsible for the high prices – the manufacturers or retailers. One food-manufacturing executive who asked not to be identified said local retailers typically bought products from manufacturers at lower wholesale prices than foreign retailers. Delivery costs are far lower, too – 20% of the product’s price is to send goods overseas, versus 1% to 3% inside Israel.
One manager for a food manufacturer pointed out that comparing the list price for food is misleading, especially over the Internet, since many items are routinely marked down at the bricks-and-mortar stores. Taking that into account, said the manager, prices in Israel and Britain are about the same.
A spokesman for Osem, which makes products like the salty snack Bisli, said in response to the survey figures that, based on price data from the global market research company Nielsen, food prices abroad are higher than in Israel. They pointed out that most of Osem’s products sold in the U.K. are exempt from value-added tax, which in Israel adds 18% to the price.
In any case, said another executive, Israeli products in overseas supermarkets are often loss leaders – products sold at a loss to draw shoppers to their stores, particularly Jews and Israelis living abroad – while in Israel they are not. He conceded, however, that instances like that were few. More frequently, though, Israeli products that are brand leaders at home and can command premium prices can’t do the same overseas, said another source.
A supermarket manager, who also asked not to be identified, insisted that it was the manufacturers profiting from higher prices, estimating that profit margins for supermarkets in Europe were 6%, compared with 3% to 4% in Israel. “This tells you that the suppliers are selling to the retailers in Israel at much higher prices,” he said.