Super-Sol to Compensate Customers for Price Gouging

The Super-Sol chain of supermarkets announced Tuesday it will compensate customers for price gouging on foods, primarily dairy products, for which the government regulates prices. The chain's practice of charging inflated prices was revealed Monday in a report produced by the Ministry of Industry and Trade's consumer rights council.

Until the end of 2004, Super-Sol intends to grant special discounts on five specific products for which the charged price was higher than the government-regulated amount. The special discount will be two times the amount at which the product was sold above the regulated price. (If a product was sold, for example, for a price one agora above the regulated figure, the special discount will be set at two agorot).

The consumer rights council said it would examine Super-Sol's proposal.

A council study revealed that 62 percent of large chains operating in Israel, including their subsidiaries, gouge the prices of regulated products. Sixty-five percent of price gouging involves dairy products.

Super-Sol and its subsidiaries were found to be the most serious practitioner of price gouging. Eighty-two percent of Super-Sol branches examined by the consumer rights council were found to be gouging prices.

The chain's managing director, Effi Rosenhoiz, said "Super-Sol apologizes to its customers on the error in price tagging of the five price-regulated products in Super-Sol and Hyper Neto branches, information that was brought to our attention by the consumer rights council. This error was the result of an unfortunate human error and was immediately corrected some two weeks ago."

David Gedaliya, managing director of Universe Club, which belongs to the Super-Sol group, cosigned Rosenhoiz's statement but dissented with the council's report.

"Universe Club is the only chain in Israel that offers five percent discounts to 'Universe Club' members, who make up some 96 percent of our customers, 365 days a year. The discount is also granted on products regulated by the government," Gedaliya said. "Thus, the council's report relates to just four percent of the chain's customers who are not club members."

Only Universe Club shoppers who are not club members will enjoy the special compensatory discount offered by Super-Sol.

The consumer affairs council said in response to the chain's proposal that it couldn't automatically be satisfied by the special discount offered by Super-Sol.

"We demand that compensation truly covers the damage caused and thus needs to be in effect for the full time period during which regulated prices were gouged. A meeting is expected to take place Thursday between the consumer affairs council and Super-Sol management to discuss compensation and we will ask company for all the data," the council said.