Gov't to Support Supermarket Price Bill

Law would require chains to provide uniform pricing at all their stores.

The Ministerial Committee for Legislation on Sunday threw the government's weight behind a legislative proposal that would require supermarket chains to sell products at the same price at all of their branches around the country.

Sponsored by Labor MK Amir Peretz, the bill, which comes up for a preliminary vote in the Knesset plenum on Wednesday, would make an exception for items that are sold at reduced prices for a limited period.

Peretz, whose party is in the opposition, welcomed the committee's support, which all but ensures that the proposal will pass the initial hurdle on Wednesday.

"The time has come to correct the warped situation in which weaker populations and the middle class pay more than in areas where there are stronger populations," he said.

However, an executive with one of the major food manufacturers said that if Peretz's bill becomes law, the major chains will raise their prices in the center of the country.

"It's not a simple issue," said the source. "Operating costs at small branches in outlying areas are higher because the retailer has to transport the merchandise from the central warehouse a greater distance and also to ship smaller quantities. On the other hand, populations from relatively lower socioeconomic levels live in outlying areas so someone has to help them. If Super-Sol needs to offer uniform prices throughout the country, residents of Ramat Gan and Jerusalem will have to subsidize residents of Sderot and Kiryat Shmona. They will have to compensate for it somewhere."

One aspect of the proposed law that is not clear is how the country's two major supermarkets, Super-Sol and Mega, will handle pricing at stores belonging to their different "sub-brands." Super-Sol, for instance, also operates Super-Sol Sheli stores, which are generally smaller and higher priced than the company's Super-Sol Deal branches, which generally have larger premises and more discounted items. It is not clear if merchandise at the two Super-Sol chains would have to have the same prices.

Similarly Mega owns the Mega in the City ("Mega Ba'ir" ) chain and the less expensive Mega-Bool stores.

Peretz said it is not yet clear how the law will deal with this situation, but suggested that if the costs at one supermarket's chain are different than those at another chain owned by the same company, they should not necessarily be equalized.

The reaction to the legislation among smaller, privately owned supermarket chains was positive, but sources suggested it would not change the current situation in which prices for the same product vary among stores of the same sub-brand - i.e., at different branches of Mega-Bool.

"If the suggestion is that a chain can continue to offer various sales promotions at different branches, it takes all of the sting out of [the law]," said Eyal Ravid, owner of the smaller Victory chain of supermarkets. "The big supermarket companies will find ways to bypass the law by having sales. Or they will be able to create endless numbers of different formats [sub-brands] and claim that the prices are relevant only at one of them."

An executive at another small chain had a similar response: "If Super-Sol wants to fight me at a particular location, they will say they are offering a limited-time promotion. Where they have competition, they lower prices to fight the private chains."

Super-Sol said it would study the issues presented by the legislation and abide by the law in any event. Mega did not provide a response.