Bnei Brak Grocers Take on Wholesalers

The owners of corner groceries in Bnei Brak have had enough. They've decided to join forces and use their combined market strength to demand equally generous terms from the big food companies. In recent years, the business-owners have watched as the large supermarkets have drawn away large swathes of the ultra-orthodox sector, leaving the corner grocers struggling to keep bankruptcy at bay.

According to the Union of Grocers in Bnei Brak, the large food manufacturers charge the small grocers at least 10 percent more for their products than they charge the supermarkets, and demand tighter credit. The grocers must either pay in cash or within 21 days, which they complain is absurd since they offer their own shoppers more generous credit.

According to one PR company that specializes in the religious and Haredi sectors, "the grocers are angry with suppliers because of the high prices that they charge and in addition, the grocers feel that they have no-one to turn to - the grocers themselves meet only sales agents and have no contact with the marketing managers or sales staff responsible for sales policies."

The first to feel that the situation was more than academic was Tnuva Mehadrin, one of the suppliers to the sector. The grocers union approached the company just before the nine-day period before Tisha B'Av - a semi-mourning period in the Jewish calendar when many religious Jews such as the Haredi community do not eat meat, and therefore sales of dairy products usually rise - and asked for special prices.

Tnuva Mehadrin wouldn't agree, and found itself having to compete hard against rivals Strauss Mehadrin and Tara, both of whom were offering attractive prices. In some cases, some of the dairy products were less than half the price of the Tnuva Mehadrin products.Sales of dairy products in the haredi sector estimated at around NIS 40 million a year.

A senior source in one of the food companies said the difficulty is that small grocers in Bnei Brak have been losing market share over recent years. Two years ago 75 percent of shopping was done at small groceries, but now the chain stores have pushed their share up to 40 percent.

He said chains like Zol Lamehadrin (part of Supersol), Zol Po (part of Clubmarket) and Shefa Shuk (of Blue Square), have all expanded their activities considerably in the city.