Procter & Gamble Under Fire for High Prices

Israelis are paying twice as much for Gillette products than shoppers are charged in other countries, Globes reported on Sunday.

Gillette Power Bead deodorant, for example, costs NIS 37.40 at Super Pharm in Israel, 150 percent more than the $4 (NIS 15) it costs at Walgreens.

A leading retailer told Globes, “Procter & Gamble have us in a trap. Retailers’ profit margins on the company’s products are very low, and the company is the main beneficiary of the high prices it charges the Israeli consumer, and it reaps the rewards. No retail chain can remove it from its shelves, with its leading brands in every category.

“Procter & Gamble has established itself in Israel and dominates categories, with brands like Gillette, so it takes the liberty of charging higher prices compared with countries where there is stronger competition or where it is still fighting for market share.

“It is the consumer who has to take action. For every Procter & Gamble product, there is a cheaper alternative that is just as good. When demand falls, maybe the company will realize that it cannot continue to gouge the Israeli consumer.”

Consumer dissatisfaction with Procter & Gamble’s pricing policy may be behind the drop in Gillette’s market share in Israel, to 78 percent from 95 percent seven years ago.

Procter & Gamble said in response, “In Israel, the Gillette brand offers a wide portfolio of products in all categories, enabling consumers to benefit from basic through state-of-the-art products, across a range of offers at any given time. The prices mentioned in the article do not reflect the average price in Israel, and they certainly do not represent prices in sales by retail chains.

“It is important to note that retail chains in Israel set consumer prices. The comparison between online retail prices and brick-and-mortar stores is fundamentally flawed, and the differences in prices between Israel and the U.S. are sweeping and are partly due to tax differentials.”

This article appeared in print on page 7 of the December 9th, 2013 edition of Hamodia.