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Lapid bashes food chains' 'shameless monopolistic behavior'

Liberman slams ‘cynical’ food price rises, defends hike in fuel and electricity cost

Finance minister claims Israel experiencing ‘mildest price rise in the world’; Bennett, Lapid, Liberman said set to discuss handouts to businesses

Finance Minister and Yisrael Beytenu party chairman Avigdor Liberman speaks during a faction meeting at the Knesset, on January 31, 2022. (Yonatan Sindel/Flash90)
Finance Minister and Yisrael Beytenu party chairman Avigdor Liberman speaks during a faction meeting at the Knesset, on January 31, 2022. (Yonatan Sindel/Flash90)

Finance Minister Avigdor Liberman responded Monday to mounting public outrage over imminent hikes in the prices of electricity, fuel and food, saying the phenomenon was global and claiming that Israel was experiencing the “mildest price rise in the world.”

Prime Minister Naftali Bennett, Foreign Minister Yair Lapid and Liberman were set to meet Monday evening to make decisions on government handouts to businesses that suffered during the past month’s COVID outbreak drive by the Omicron strain, Channel 12 news reported.

As several food chains announced significant price hikes and fuel prices were set to reach a seven-year high, reports said Monday that electricity prices would rise the following day by 5.7 percent, more than the previously expected 4.9%, resulting from the rise in coal prices.

At a faction meeting of his Yisrael Beytenu party, Liberman said Israel’s price hikes compared favorably with the much greater ones in Britain and Sweden.

“We cannot ignore the rise in oil prices, currently around $87-88 per barrel. I think it’s a several-decade record. Gas is also up 87% and maritime cargo shipping by 640% since the start of the pandemic. There are increases all around the world, and here it’s the most moderate and the economy is functioning,” he said.

But regarding food prices, Liberman said “the situation mustn’t be cynically exploited,” arguing that manufacturers and importers were in good shape and vowing to take action if they don’t explain the price hikes by the end of the day.

Sidestepping a question on whether he was weighing lowering taxes, Liberman said his ministry and the government as a whole were advancing a “series of steps” that would be decided over the next 7-10 days.

“I have no intention of acting rashly. I believe in in-depth, comprehensive groundwork, and when we’re ready we’ll announce it,” he said.

People shop at a supermarket branch in Givat Shaul, Jerusalem, October 27, 2021. (Yonatan Sindel/Flash90)

Lapid also touched on the matter in his Yesh Atid faction meeting, saying that as the Omicron wave was starting to ebb, “the Israeli economy has started a trend of growth. This is welcome and is the result of correct policy by the government, but some have been hurt and we must not abandon them. The self-employed were hurt the most — small and medium businesses.”

Lapid similarly said intense discussions on the matter were being held along with the finance and economy ministries and Bennett.

“The best plan is to first of all postpone tax payments, and then provide compensation in accordance with the decrease in income over a certain percent,” he said. “This would enable us to focus on the worst-hit industries: culture, events, tourism, stores that are not part of chains.”

Lapid emphasized that he wasn’t talking about big chains: “They’re doing great, and they should know we won’t hesitate to act against them. There is a difference between price hikes — and overpricing and shameless monopolistic behavior.”

Foreign Minister Yair Lapid speaks during a Yesh Atid faction meeting at the Knesset, on December 13, 2021. (Yonatan Sindel/Flash90)

On Sunday, the ministries of finance and economy and industry sent warning letters to the heads of major food companies and retailers in Israel, urging them to reverse their decisions to raise prices on food products this year. The ministries cited economic hardships brought on by the pandemic, as well as the companies’ multi-million-dollar financial revenues or executive bonuses for 2021.

The ministries said they expected the food retailers to “be responsible” and withdraw their announcements of price hikes in a country with an already-high cost of living.

“We will continue to monitor consumer prices… [and] we will not hesitate to take the required steps to secure a fair, competitive economy,” said Liberman and Economy Minister Orna Barbivai in the joint letters. “Your announcement[s] of price hikes at this time is cynical and offensive to the citizens of the country.”

The messages were sent to seven food and cleaning supplies retailers in Israel including Strauss Group, Osem (owned by the Swiss company Nestle), and Sano.

In a letter sent Monday to Liberman and Barbivai, the CEO of Strauss denied the company plans to raise prices.

“Contrary to the impression that was maybe created, Strauss in recent months did not announce it intends to raise prices in Israel,” Giroa Bardea said, adding that the firm views price hikes as a “last resort.”

Late last month, Osem drew a torrent of criticism and calls for a boycott after it announced that it would be raising the prices of its products starting in February by three to seven percent, owing to a rise in the prices of basic ingredients.

Prime Minister Naftali Bennett is surrounded by security as he arrives for a Yamina faction meeting at the Knesset, January 31, 2022. (Yonatan Sindel/Flash90)

Separately, fuel prices were set to rise Monday night to levels not seen for seven years, to NIS 6.71 per liter of 95 octane petrol in self-service, drawing additional outrage.

In early December, Liberman said that bringing down the cost of living was the most difficult challenge facing the government, which is also struggling to bring down spiraling property prices.

The government has significant plans to reform the agricultural sector to allow the import of produce, including eggs and dairy products from abroad. The move is meant to increase competition and make a wider range of products available to Israeli consumers.

Outrage over prices grew last month, over a decade since Israel last saw widespread social unrest on the matter. A price hike in cottage cheese, an Israeli staple, was the first spark that led to the 2011 “tent revolution,” which saw young Israelis furious at sharp rises in rents and cost of living erect shelters on the upmarket Rothschild Boulevard in the heart of Tel Aviv. Thousands of protesters soon took to the streets across Israel, shouting slogans demanding social justice. However, the movement ultimately did little to affect rising costs.

Ricky Ben-David contributed to this report.

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