Auditor Report Reveals Disturbing Disparities in Israel's Food Industry Prices

In a recent audit conducted by Auditor Engelman, it has been disclosed that the level of prices in Israel, in terms of purchasing power, is on average 27% higher than in other OECD countries. The gap in the food industry is even more pronounced, standing at a staggering 37%. The audit, concluded in February 2023, points to market concentration as a significant factor contributing to the price disparities, urging increased scrutiny and consumer-oriented focus.

One alarming revelation from the audit is that between 2018 and 2022, the price committees in the food industry failed to examine the addition of new products for supervision, except for a limited assessment of competition in the wholemeal bread market. The number of enforcement cases in price supervision for food products also saw a significant decline in 2021, dropping from 1,574 cases in the previous years to 127 cases.

The report highlights various deficiencies, including prolonged periods for regular updates to the prices of controlled products, insufficient supervision on the price of whole bread, and a lack of reports on monopolies in the food industry. Notably, the audit reveals an 82% gap in the price of wholemeal bread in Israel compared to its average price in the USA, England, and Spain.

The disparity in prices extends to different types of bread, with a staggering 253% difference between the prices of bread made from whole wheat flour and those made from regular flour that are regulated. Additionally, since the removal of "tight" supervision at the end of 2021, the average price of imported butter has surged by 60%, in stark contrast to the modest 5.7% increase in the price of local butter.

Auditor Engelman recommends that price committees and supervisors intensify their monitoring of various markets, emphasizing consumer preferences over the past year. Furthermore, he advocates focusing on essential products, particularly those lacking competition and exhibiting abnormal profitability, with an emphasis on products promoting health benefits and nutritional security, such as wholemeal bread.