Next Target for Kachlon Reforms: Product Standards Ratings

Israel Finance Minister Moshe Kachlon is out to break another monopoly – that of the Israel Standards Institute, currently the only organization that is empowered to rate imported or locally produced items, and ban them from the market if they are deemed unsafe. Under new rules proposed by Kachlon, standards will be issued by licensees that will be empowered by the government to evaluate products.

While products can be sold without the approval of the Standards Institute, the organization still has the power to veto products which it deems unsafe. In addition, an Institute seal of approval is considered a promotional tool that can help sales, with products bearing the seal seen as higher quality than others.

That is exactly the problem, according to Kachlon. Business people have often complained that the Institute is controlled by “interests” that “bully” the market, using its veto power to keep out competitors, and conferring its approval on products made by large companies with which it has “arrangements.” By licensing competitors, Kachlon believes that he will be able to foster an atmosphere of free trade, Globes reported.

The new competition will also encourage the Institute to improve its efficiency. According to Globes, the Institute is a perennial money-loser, and is victim of bloat and excess bureaucracy.