Something new and significant has happened in Israel. Out of the blue, a lone consumer named Yitzhak Alrov stood up one day and said "enough is enough." His protest was focused on a single product: cottage cheese. The choice of the lumpy cheese was no accident, cottage cheese is one of the most basic items in the Israeli shopping cart. It is also an especially irritating example of a phenomenon we have experienced in recent years: price controls on a product are removed so that "market forces" can set its price, which quickly jumps dozens of percentage points. Alrov's is a welcome initiative - but it is important for us to remember that cottage cheese is just a symbol - a symbol of disproportionately rising prices, the lack of competition, and price gouging by retailers and manufacturers at the expense of the public, which until recently saw nothing illogical about paying NIS 8 for a container of cottage cheese.
The retailers and manufacturers have a common interest in preserving a low level of competition and high profits. For them, any instance of rising input prices (taxation, shipping, etc.) is an opportunity to pass on the entire cost to consumers, and them some. In other counties (notably western Europe and the United States) where there is competition, the manufacturers and retailers absorb part of these costs, knowing that otherwise there would be a drop in sales and lost profits. In Israel that doesn't happen and as a result the cost of living keeps rising.
In Israel, chutzpah has no limits, and last week it was proven unequivocally that prices here are incomparably and unjustifiably high. The organization I run, Public Trust, is joining the struggle. We won't let Alrov's struggle fade, nor will we let decision-makers evade their responsibilities toward Israeli consumers. There is no reason why the Israeli consumer should pay 84% more, on average, for baby formula, just as there is no reason why a bottle of ketchup - a product found in almost every home - should cost 40% more in Israel than in western Europe or the U.S.
This week, the "just like abroad index" was unveiled. Its goal is simple: for Israelis to pay prices like those abroad. The index will be expanded every week to include new products and services such as cooking gas, internet and so on. Every week there will be some surprises - price comparisons of products to ensure that the supermarket chains cannot deceive the public.
The protest cannot remain confined to dairy products. Likewise, simply returning price controls to dairy products will not be sufficient. Let's not forget that there is still supervision over the price of gasoline, butter and milk - and the prices are still sky-high. With regulation, the committee that sets the prices receives its data from the companies under supervision, which in turn leads to a very high market price. The failure belongs to the regulator and the Antitrust Authority, which do not prevent market concentration and price coordination. It's time for the public to show them all exactly how much it's ready to pay - it's ready to pay "like abroad."
The writer is the CEO of Public Trust, a consumer advocacy group.
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