Major importer insists Israeli cost of living is not exorbitant

CEO expresses concern over pending legislation aimed at restricting major importers; 'After 30 years building our company, 'it's disheartening to face dissolution at the hands of regulators'
Navit Zomer|
"At the end of it all, after dedicating three decades to building our company to glory, a regulator suddenly appears and demands our breakup," stated Yanon Ben-Anat, CEO of Diplomat Distributors Ltd., during a regulatory conference.
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This marks the first public response from the company's representative, who is under the control of the Weinman family, to the government ministers' promises to address the cost of living by restricting monopolies.
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משמאל ינון בן ענת מנכ"ל דיפלומט בכנס הרגולציה עם המנחה אלכס קומן
משמאל ינון בן ענת מנכ"ל דיפלומט בכנס הרגולציה עם המנחה אלכס קומן
Yanon Ben-Anat, CEO of Diplomat Distributors Ltd.
(Photo: Eclipse Media)
"The issue of the cost of living is a multifaceted challenge, and attributing it solely to Diplomat is not a solution, Ben-Anat said. "Contrary to what some media reports suggest, Diplomat earns a modest and fixed percentage. Israelis have a tendency to feel deceived, and when they encounter lower-priced products abroad, they often create narratives that don't always align with reality. When conducting a thorough comparison, it becomes evident that Israel is not more expensive than leading European countries," he said.
He specifically addressed Minister of Economy Nir Barkat's now-defunct initiative, emphasizing its key aspect of prohibiting large importers like Diplomat and others from representing more than one major international supplier and obligating them to sell the remaining representation to other entities.
Following the CEO of Diplomat's statement, Minister of Economy and Industry Barkat said, "The bill, which includes penalties of up to $28 million, will be brought to a vote for the second and third readings in the Knesset plenum today. This legislation aims to protect parallel imports, enhance competition, and ultimately bring down the prices for Israelis during checkout."
Finance Minister Bezalel Smotrich last month established a special committee tasked with addressing the dismantling of monopolies. "As Israel's governing body, our responsibility is to foster an environment conducive to genuine competition, which requires breaking up monopolies that have been established over several decades," Smotrich said. The committee has been given a three-month deadline to propose measures that would facilitate the dismantling of monopolies and major food corporations, including Diplomat and Tnuva, among others.
It is important to note that such a step is uncommon and involves intricate administrative processes or legislation. Economists who advocate for the principles of a free market have criticized Smotrich and Barkat for their contentious remarks directed toward business entities.
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Brands imported by Diplomat
Brands imported by Diplomat
Brands imported by Diplomat
(Photo: Meirav Crystal and Tzvika Tishler)
Earlier this month, Diplomat Distributors Ltd. implemented an average price increase of approximately 7% on its distributed coffee, cookies, and tuna products. Responding to allegations about the company's failure to reduce product prices, Ben-Anat said, "First and foremost, there was no price increase. However, adjusting prices in the retail market is a significant and intricate process and is considered a last resort.
"We are actively seeking efficiency solutions across different product categories, but there are instances where price adjustments become necessary," he said. "The most effective approach to lowering the cost of living is by fostering increased competition and removing barriers. Any product that can be sold in Europe can also be sold in Israel. There are also specific regulations here, that need to be abolished. For instance, the unique regulations on importing washing detergents, which impact prices. Our objective is to reduce restrictions, increase product imports, and allow the market to progress," he said.
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