Israeli Food Sector Controlled by Too Few Hands, MKs Say

The Israeli food industry is much too concentrated among a few companies, according to most speakers yesterday at the Knesset Economic Affairs Committee. The committee met to discuss market failures in the Israeli food sector.

Prices at local private grocery stores are higher than in supermarket chains - by double-digit percentages, said MK Amir Peretz (Labor), who initiatived the debate. He said the balance of power among the chains, food manufacturers and suppliers was such that small stores cannot be competitive.

"It turns out that the poorest parts of the population ... are those who buy at the local grocery stores," Peretz said, noting that such people were unable to travel far to the cheapest supermarkets.

The large food manufacturers such as Strauss, Tnuva, Osem and the Central Bottling Company, better known as Coca-Cola Israel, favor the big chains. Peretz recommended that Antitrust Commissioner Ronit Kan set regulations requiring suppliers to provide the same conditions to all stores.

"I heard of a grocery-store owner who waits for sales at the big chains and then buys products there on sale and puts them in his store, because that's cheaper than buying directly from the manufacturer," said Peretz.

Kan told the committee that competition is for the good of consumers and no one wants the Antitrust Authority to intervene in a way that prevents discounts for the public.

Eli Stav, the chairman of the forum representing private grocery stores, said that "the large supermarket chains decided long ago that this business belongs only to them." He also gave examples of the price differences, which he says reach 25%. Stav added that the solution was a central logistics center to supply small retailers at fair prices.