Food is Cheaper, But Not for Israeli Consumers

Steep drops in wholesale food prices during the past year were not passed on to the Israeli consumer, according a Globes survey of the domestic market.

In most cases, food manufacturers did not lower their prices in accordance with reduced raw material prices, according to Victory Supermarket Chain CEO Eyal Ravid. The Israeli executive said, “I have not encountered lower prices, certainly not in the price lists. There may have been bargains here or there, but there should be a change in the catalogue price, not as a bargain. It’s amazing, but it’s nothing new; that’s how it goes here. Why? Because they can.”

Prices plummeted for many commodities in 2015: For coffee (33 percent), wheat (21 percent), meat (19 percent), and corn (17 percent). In just two years, the global commodities price index declined 21 percent in the food category. The only food prices that did not fall, such as fruits and vegetables and fish, faced import barriers.

Globes singled out Strauss Group and Osem, which have not brought down the price of their coffee products to retailers. Coffee and tea prices for consumers were down only 3.3 percent in 2015, despite the 33 percent drop in wholesale costs.

Strauss Group defended its pricing policy: “The effective price for the cocoa sold to suppliers has been at an all-time high for the past two years. It has not fallen, and we nevertheless lowered the price to the consumer by 10 percent in March. For coffee, in January alone we lower edthe price of dried coffee products by 13 percent, and beyond that, the effective price for the consumer has been slipping substantially for the past two years. This can be seen in the StoreNext data.”

Osem declined to comment.