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'Israeli consumer exploited' Photo: Thinkstock
'Israeli consumer exploited' Photo: Thinkstock
 
 

Food prices up 12.7% in 3 years

Comparative survey conducted in Knesset shows price hikes in Israeli food industry 5.5 times higher than in Europe

Zvi Lavi
Published: 07.13.11, 08:43 / Israel Business

The rise in food prices in Israel over the past three years was 5.5 times higher than in Europe, according to a comparative survey conducted by the Knesset's research and information center for the Economic Affairs Committee.

 

Food prices went up by 12.7% on average during that period, compared to an average price hike of 2.2% in Europe.

 

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The price comparison was conducted after an analysis and adjustment of the different component in each basket, taking into consideration the overall expenditure per family.

 

In Israel today, food spending is double the average spending of a European family. The difference is in consumption habits, although Israelis buy less food due to the higher prices compared to Europe. In addition, in Europe food prices include restaurant rates, which are not part of the Israeli index.

 

The survey was based on figures compiled by the Central Bureau of Statistics in Israel compared to Eurostat data. It presents both the changes in prices in other industries, especially housing expenses which include rent and apartment maintenance costs.

 

According to the survey, apartment maintenance expenses rose by 32% on average per Israeli family compared to only 14.5% in Europe.

 

A comparative segmentation of food prices in Israel compared to different countries in Europe points to a higher than average difference.

 

It turns out that bakeries' bread production cost went up by 48% in the past years, while the prices of subsidized bread rose by only 40%, meaning the bakeries allegedly absorbed the difference but were compensated by the government.

 

The price difference which helped supermarkets earn a pretty penny is prominent in the ready food category. While industrialists' cost saw a 14.5% increase in the past few years, consumer prices went up by more than double – 35%.

 

A relatively small difference was found in the dairy products category between the costs of dairies that went up by 25%, while consumer prices rose by 30%.

 

A dramatic difference was recorded in the prices of wine and alcoholic beverages. The prices charged by wineries went up by 4.2%, while the consumer price rose by an average rate of 30%.

 

'Unbelievable that Europe is cheaper'

Knesset Member Carmel Shama-Hacohen (Likud), chairman of the Economic Affairs Committee, said in response to the survey's findings: "It's unbelievable that Europe is cheaper than Israel, and by dozens of percentage points.

 

"The Knesset's research center proves that cottage cheese is not the only product with an exaggerated price. The Israeli consumer is exploited on each and every shelf in the supermarket and cannot avoid it. The figures provide that the Israeli consumers are suckers."

 

MK Shama-Hacohen added, "It seems that the centralization cancer has metastasized in all food and consumerism industries. From this moment on, if there is no drastic change, the accusation of the business companies' greediness will be replaced with an accusation of elected representatives' indifference. We need a shock treatment of immediate supervision of basic commodities for a limited period of time."

 

Moran Azulay contributed to this report

 

 

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