The Ministry of Economy and Industry is alleging that manufacturers and exclusive importers of toiletries are charging much higher prices in Israel than in the rest of the world, in particular Poland.
In an announcement published today under the title, "The Inconceivable Gluttony of the International Manufacturers and Exclusive Importers Exposed," the Ministry of Economy and Industry alleges that most consumers have already known this for years, and have been the chief victims of price differences amounting to double or more for products sold in Israel.
The ministry is accusing the manufacturers of exploiting the public, not the retail chains. Several examples are provided. One is Colgate Optic White toothpaste, which is sold by international manufacturers and exclusive importers to stores in Poland for NIS 4.20, compared with a NIS 15.40 paid by stores in Israel.
Another example is Nivea cream, which manufacturers sell to Polish stores for NIS 26.80, compared with a NIS 76.70 price for stores in Israel.
A suspended reform
The Ministry of Health suspended the cosmetics reform. This reform was due to become effective this month, following years of collective information in order to lower the prices in Israel by encouraging parallel imports.
Minister of Economy and Industry Eli Cohen, who is trying to push the reform through, said, "The Israeli consumer has become a cash cow for the international manufacturers and exclusive importers. It is time to put an end to this bonanza. We will use all means to halt the abuse of the Israeli consumer. There is no need to buy from someone who holds the consumers lightly."
The fact that the Israeli consumer is paying more is also reflected in the busy traffic on international websites in order to buy daily consumer products. The best example is US chain Target, which was astounded by the massive Israel response to its weekend campaign without delivery fees. Among other things, Israelis loaded up on boxes of Colgate toothpaste and Gillette razor blades. Target canceled most of the deliveries.
"Figures obtained by the Ministry of Economy and Industry show a very sad picture. International manufacturers and exclusive importers are selling to Israel at much higher prices in comparison with other countries in the world," the ministry's announcement read. "The very large differences between the prices in Israel and Poland are linked primarily to the international suppliers, such as Colgate, Palmolive, Unilever, and Procter & Gamble, which are charging Israel much higher prices, and to importers, such as S. Schestowitz and Diplomat, which enjoy exclusivity in Israel, in contrast to other countries in the world, where there is a range of distributors.
"International manufacturers and importers are taking advantage of exclusivity in representing international brands to charge high prices in the Israeli market, leading to unreasonably high price differences between Israel and the rest of the world. The entry of international companies into Israel selling at a fair price, as in the rest of the world (this refers to the Decathlon chain, M. R.-C.), proves that it is worthwhile for both the companies and the consumers, and will halt the purchase of products by Israelis overseas and through personal imports."
The Ministry of Economy and Industry listed a series of measures aimed at encouraging competition, among other things imposing a duty to issue a report on pharma products - a method that has proved completely ineffective in food products (referring to the database of prices of the food chains, which has become mainly a tool for comparing prices by the chains themselves).
What could change the picture and lead to Israeli consumers finding the cheap prices abroad is a change in the personal import regulations by raising the maximum tax exempt purchase from the current $75.
Last week, the rules for food imports to Israel were revised, referring to dry food products – a segment in which thousands of Israelis ordered products from Target (e.g. health snacks). Many of these packages remained in the US, among other things as a result of lack of knowledge concerning the tax laws in Israel requiring special approval. Buyers are now being informed of a change that will make it easier to buy from overseas websites. A person who has ordered a dry food product will be exempt from the procedure for early release of food imports, except for a declaration of the contents of the delivery. In addition, the quantities of dry food that can now be imported are up to 15 kilograms per delivery and up to five kilograms per item (the restriction up to now was up to three kilograms per item). For food supplements, there maximum quantity is 15, and no more than five of each item.
The regulations also state that canned goods, including fish products, up to five kilograms of hard cheese, powdered milk (but not baby food), sweets, and beverages can be imported. The maximum number of personal import packages is six per year. Note that imported food must be packaged in advance with labels, including a mark and list of items.
Published by Globes [online], Israel Business News - www.globes-online.com - on September 10, 2017
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