Comptroller: Israelis buckling under high cost of living, gov't must do more

"The State of Israel is characterized by high concentration in the food market," said the comptroller. "We cannot accept the lack of action by government officials regarding concentration."

 A CUSTOMER shops for groceries at a Rami Levy supermarket branch, in Jerusalem. (photo credit: YONATAN SINDEL/FLASH90)
A CUSTOMER shops for groceries at a Rami Levy supermarket branch, in Jerusalem.
(photo credit: YONATAN SINDEL/FLASH90)

Israel's food prices rose between 2.9 and 6% in the first three months of the Israel-Hamas war, according to a report by Israel's State Comptroller Matanyahu Englman released Tuesday.

These price hikes followed an 18% cut in manpower in this industry and a 50% cut in the production of Israeli factories, the report explained.

The report looked at concentration in the food and final goods markets and the impact of this on Israel's cost of living.

"The State of Israel is characterized by high concentration in the food market," said the comptroller. "We cannot accept the lack of action by government officials regarding concentration."

This concentration "has direct implications on the cost of living. In the past year, we have experienced price increases, and the citizens of Israel are buckling under the [weight of the] cost of living," he said.

 Israel's State Comptroller, Matanyahu Englman, during his appointment ceremony as the new president of EUROSAI, May 27, 2028. (credit: Copyrighted free use.)
Israel's State Comptroller, Matanyahu Englman, during his appointment ceremony as the new president of EUROSAI, May 27, 2028. (credit: Copyrighted free use.)

"The prime minister and ministers must fight the high cost of living."

The purchasing power of Israelis is 300% lower than that of consumers in France, the US, and England when looking at hourly wages purchasing power for products checked in the report, according to the comptroller.

Food prices, not including fruit and vegetables, have risen 23% since 2011, and the price of fruits and vegetables raised 37% in the same time frame, the report said.

The report said that 36 of 38 categories in the food industry have a high level of concentration. In 20 categories, the part of the three companies who dominate the category is higher than 85%, and the average of the part of these companies in all categories is 84%, according to the report.

The market share of the five biggest suppliers in the food and final goods markets has shrunk slightly since 2017, from 42.7% to 37.5% in 2022, but concentration in these markets is still high, the report said, citing Israel's Competition Authority.


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Import-to-gross domestic product ratio

Israel's import-to-gross domestic product ratio is just 23.4% compared to 47%, which is the average in OECD countries, the report noted.

Around 25% of Israel's big stores have a high level of geographic concentration, the report noted.

Israel's Competition Authority has not done enough to examine its part in breaking up concentration in these markets, the report noted.

The report also highlighted the fact that the ministerial committee to fight the high cost of living has only met seven times since it was founded in June of 2023 in spite of prices increasing and the impacts of the Israel-Hamas war on prices.

The comptroller called on Israel's political leadership to follow up on Israel's reforms and to verify that they are updated and appropriate in order to contend with the cost of living and increased food prices.