Israel launches campaign to fine retail chains failing to display prices on products
Economy minister steps up enforcement of law mandating that supermarkets and retail chains show costs of items; calls on consumers to report retailers
Sharon Wrobel is a tech reporter for The Times of Israel
Israel on Thursday launched a campaign to clamp down on supermarkets, grocery chains and stores that fail to affix adequate and correct price stickers on the products and services they sell.
Israel’s Economy Minister Nir Barkat instructed the ministry’s and the Consumer Protection Authority’s supervision bodies to step up the enforcement of the Consumer Protection Law, which requires businesses to display and affix prices for all products and services offered for sale. Price information is essential for consumers to compare prices effectively and make informed purchasing decisions.
“Not marking prices of products is against the law, and unfortunately it is sometimes abused by some retailers to raise prices without the consumer having any chance to know about it,” said Barkat. “This is a phenomenon that is unacceptable.”
Alongside stepping up the enforcement of the legal requirement to clearly display prices tags, there will be an emphasis on making sure that the checkout price at the cash register matches the price labels displayed on the product on the shelves, the ministry said in a statement.
Walking through the aisles of local supermarkets in Tel Aviv in recent weeks, this journalist observed that although there were price tags on some products, much were missing.
In some cases, the only way to determine the price was to ask store staff, who explained that the absence of prices was due to staffing shortages and that the chain needs to update product prices due to the rise in the value-added-tax, which came into effect on January 1.
Barkat is calling on consumers to notify and report businesses that don’t affix prices on products as required by law to the Consumer Protection and Fair Trade Authority and the ministry’s enforcement administration.
The Economy Ministry said the campaign will be carried out throughout the country in the coming weeks. Businesses that violate the law will face financial fines of thousands of shekels for a single violation, and in repeated cases, retail chains will be hit with a fine of tens or even hundreds of thousands of shekels, the ministry said. In extreme cases, criminal charges will be considered, which may result in bigger fines and even prison terms, it was added.
Meanwhile, over the past year, Israel’s largest supermarket chains have benefited from price increases and strong demand for groceries as more Israelis stayed in the country amid the war with the Hamas terror group. Last year, many Israelis were stranded at home during the peak summer season and Jewish holidays as foreign airlines halted their services to and from the country due to the war.
Shufersal, Israel’s largest supermarket chain, saw its profit in the July to September quarter surge about 370 percent to NIS 238 million ($107 million) on a year-on-year comparison. Shufersal is among the top three supermarket chains that account for over half of the Israeli food retail market. The high concentration in the Israeli food sector is limiting competition, putting upward pressure on prices, and raising the cost of living in the country.
“Failure to display prices on the products greatly harms the consumer public, among other things, because it deprives them of the basic and essential right at time of price increases, to compare prices,” the Israel Consumer Council stated in an e-mailed response to The Times of Israel. “The systematic violation of the law during a period when price hikes fuel a drastic increase in net profit levels of retail chains compared to the period before the war, shows that the chains will harm consumers to boost their profit, both by raising prices and by not displaying prices.”
“We hope that the enforcement campaign will indeed put an end to the phenomenon,” the consumer council added.
The campaign comes after Barkat recently backtracked from a proposed plan to replace paper-and-ink price tags or stickers with digital or electronic labels to mark the cost of products in the aisles of supermarkets and retailers. The proposed plan to digitize the display of prices raised expectations that the government would draft a bill to change the law, mandating retailers to mark all products with physical price tags.
At the time, the Consumer Protection and Fair Trade Authority said that the way prices are presented in Israel takes considerable labor costs since it is a time-consuming task that involves making printed labels and putting them in place, often inaccurately causing discrepancies between shelf and checkout prices.
However, in recent weeks concerns were raised that the switch to digital price tags would give retailers the ability to quickly raise the price of a product and would make it harder for consumers to compare prices while stifling competition.
