The Ministerial Committee regarding the Cost of Living, headed by the Minister of the Economy, Naftali Bennett, will meet to discuss ways to reduce the cost of living and eliminate barriers to competition. The committee will, inter alia, discuss competition and cost of living considerations in setting trade levies, limiting the powers of a minister in imposing surcharges that may lead to an increase in the cost of living, a review of price controls, the improvement and streamlining of the procedures for 'doing business' in Israel, the causes of import barriers, the low level of market competition and the significant price differences between Israel and many countries abroad. Following the discussion, the Minister of Finance and the Minister of the Economy will announce their decision to set up an inter-ministerial team to examine the import barriers and the ways in which it will be possible to reduce the difference in prices of imported products between Israel and the world.
The team will be headed by the Director General of the Ministry of the Economy, Amit Lang, and Yoni Regev, the Deputy Budgets Director, will serve as his substitute. The team will also include senior representatives from other government ministries.
The inter-ministerial team for examining the barriers on imports will be entrusted with performing comparative price analyzes between Israel and the world in the import arena, market mapping, identification of market failures and other competition barriers as well as the formulation of recommendations to increase competition and improve consumer welfare. The team will complete its work and submit its recommendations within six months.
The Ministry of the Economy and the Ministry of Finance note that factors such as the size of the Israeli market, the high level of concentration, information gaps, regulatory gaps, exclusivity agreements and other barriers to competition lead to a low level of competition and prevent a decrease in consumer prices. As a result, there are price differences in certain product categories that can even reach hundreds of percent between the prices of identical products in Israel and abroad. Among the possible causes of the low level of competition and the difference in prices between Israel and abroad are government import barriers such as regulation, legal business requirements, custom duties, import quotas and standards. In addition, there are various business barriers such as entry barriers, exclusivity agreements and parallel import barriers, minimum price determinations and the additional anti-competitive norms of importers and local manufacturers.
The Minister of the Economy and the Minister of Finance said: "The struggle we are leading to reduce the cost of living in Israel continues at full speed. The Israeli market is small and naturally pursues concentration - we will work to promote competition wherever it does not exist. We will not hesitate to deal with the most complex issues. Now is the time to deal with the draconian barriers associated with the opening of the import market – there is no reason for the prices of products that each of us consumes being hundreds of percent higher than the price abroad. There is no reason why E-commerce should not enjoy a larger share and there is no reason why more products should not be imported as parallel imports."