In August 2011, the Kedmi Committee on dairy products, the first committee established in response to the cottage cheese protest, submitted its preliminary recommendations to the cabinet. Ten months later, nothing much has happened.
Today, the Kedmi Committee published its final recommendations, and in two weeks it will submit them, after a hearing, to the cabinet. Anyone who expected a revolution in Israel should wise up. The Kedmi Committee was not established to launch another revolution, such as was made in the mobile market. It was established to give the government quiet from consumers, who were sick of price gouging.
Although the Kedmi Committee gave an official stamp of approval that prices in Israel were exorbitant, and that concentration in the economy was unreasonable, and resulted in exploitation of consumers for years, it did not dare take its recommendations to their logical conclusion. The committee's report includes a long list of conclusions and recommendations, but a careful reading of them quickly makes it clear that implementing them is far off, if only because of necessary changes in legislation.
In many cases, the Kedmi Committee avoided dealing with the root of the problem or offering an interim solution until the necessary legislation is passed and the recommendations are implemented. For example, it does not recommend reimposing price controls on food items, even temporarily, despite proving that prices for price-controlled dairy products remained sane, while prices for dairy products for which price controls were removed skyrocketed.
The committee recommends a very gradual cutting of quotas and some of the restrictions it advises levying on vendors are extremely difficult to enforce.
The Kedmi Committee is a government committee. Its members are ministers' representatives, which is why it is no surprise that its appendices include proposals for the necessary legislative amendments, and even a fast-track schedule for implementing them. But apparently no one really intends for this to happen, at least not quickly. Therefore, the current report seems to be just another fudging of the issue.
If we seem pessimistic to you, you should hear what a committee member told "Globes" today. "I cannot but agree that the road for implementation is a long one. There are things that need primary and secondary legislation, and even if the Knesset committees were on our side, there would still be someone who will want to torpedo it. Do you know what it's like to pass an agreed upon directive by legislation? You know what Shufersal and Mega and the others would do? They'd slaughter us."
Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH) subsidiary Shufersal Ltd. (TASE:SAE) is Israel's largest supermarket chain, and David Wiessman-controlled Alon Holdings Blue Square - Israel Ltd. (NYSE: BSI; TASE: BSI) Mega brand is the second largest chain.
Published by Globes [online], Israel business news - www.globes-online.com - on June 4, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012