Coronavirus Causes Appliance Prices to Jump, But Some Doubt Motives

YERUSHALAYIM -
Prime Minister Binyamin Netanyahu (C) and Health Minister Rabbi Yaakov Litzman (R) arrive at a tent during his visit to the Chaim Sheba Medical Center at Tel Hashomer, for discussion on the coronavirus, Wednesday. (Heidi Levine/Pool via Reuters)

Electronics and appliance firms in Israel announced that they will be raising prices by 10% to 15% – because of anticipated supply difficulties with merchandise from China. Among the items set to go up in price are refrigerators, washing machines, cellphones, air conditioners, and more. The supply difficulties are, of course, due to the spread of the coronavirus, which has significantly hampered Chinese manufacturing and shipping.

Last week, Israeli air conditioner manufacturers Electra and Tornado said that there have been “significant disruptions” in their supply chains, and as a result, they would have no choice but to raise prices in the coming days. Tadiran, another air conditioner maker, said it was not raising prices just yet, but that customers could expect “significant delays” on their orders.

But some economists said that the companies were “cynically” trying to take advantage of a difficult situation to line their own pockets. The economists told Yediot Acharonot that most factories in China have already gone back to work, and that in any event, appliance companies in Israel get much of their products not only from China, but from Turkey as well. In addition, prices by Chinese suppliers have not jumped significantly.

When asked by the newspaper, Electra, which makes and markets home appliances, said in a statement that Medea, “the biggest manufacturer of air conditioners in the world, has adjusted prices for materials it provides us with as it does from time to time. The price adjustments raise prices by 2% to 3% for a limited number of models.”

Ro’i Reznik, head of the Israeli Merchants Association, told Yediot Acharonot that there is indeed a supply and price problem. Many Israeli firms have no choice but to continue to buy from China. “If we return to our suppliers in Europe and the U.S., we are going to see price increases of 30%,” he said. “Fortunately, some of the biggest factories in China are back at work, but it is going to be awhile before supply catches up with demand. Many companies that are facing supply pressures have actually not raised prices, and they would prefer not to,” he added.