33% of food stores violate price controls

Violations of government-set price controls more than doubled in the first half of 2017

The list of items on which the government imposes price controls includes only 22 products. They include: bread, eggs, milk and dairy products, hard cheese, and salt. A number of laws have been enacted concerning these products, such as posting a sign stating the product which is under a price control. Businesses are expected to exercise care in selling these products at the up-to-date controlled price.

An announcement by the Agriculture and Rural Development Ministry and the Economy and Industry Ministry indicates that in the first half of 2017, one of three inspected businesses charged more than the controlled prices – twice as many as in the corresponding period last year. Most of the violations concerned eggs, but milk, cheese, and sour cream were also involved. Most violations – 72% – were committed by grocery stores and mini-markets, mostly in the central region.

During this period, 4,752 businesses in all enforcement areas were checked. Roughly 500 complaints were filed, in which 183 cases of illegally high prices were found at the consumer sales point (sometimes more than one violation at a sales point), compared with only 120 cases of price control violations in all of 2016.

There were price control violations for a variety of products. The main product was eggs, which were sold for 10-12% more than the maximum permitted price of NIS 10.55-12.50 per dozen (depending on size). The price was most recently revised in February 2016, after the price of most price-controlled items was cut.

There were also violations of price controls on milk, amounting to 10% more than the maximum price of NIS 5 for a bag of 3% milk and NIS 5.75 for a carton of 3% milk.

A similar outcome was with sour cream and for 1% milk, on which the maximum legal price is NIS 4.65 per bag and NIS 5.40 per carton. For sweet cream, which was added to the list of price-controlled items three years ago, consumers paid 10% more than the controlled price of NIS 5.95. Prices 10-15% in excess of the maximum permitted price for white cheese were also reported.

The Agriculture and Rural Development Ministry the Economy and Industry Ministry say that they have stepped up enforcement, filing indictments against business owners and managers (in cases in which they have committed offenses or violated their duty to prevent offenses) when prices exceeded the maximum allowed price on basic commodities.

The ministries added that most of the cases had ended in criminal convictions of business owners and managers and the imposition of deterrent fines and penalties. For example, a court recently imposed a maximum NIS 15,000 fine on a mini-market owner in Rishon Lezion for exceeding the maximum price on six basic items, including break, milk, cheese and sour cream.

In another case, a court convicted a company of charging excessive prices in its pastry shop in Modi’in for three basic commodities, including eggs and 4.5% cultured milk. The court fined the company NIS 22,600, plus an additional NIS 226,000 to be imposed in the event of further offenses.

Economy and Industry Ministry chief prosecutor Yuval Avraham said: “Let it be emphasized that in contrast to allegations by business owners in this field, what is involved in most cases is not an accidental exceeding of the price amounting to a few shekels from a single person, which is also fundamentally unacceptable, illegal, and harmful to someone unable to afford basic commodities, or who finds it difficult to afford them. What is happening here is systematic charging of more than the maximum price from the entire public, especially economically disadvantaged people.

The ministries involved are determined to take all necessary measures in order to deter business owners from violating the law and charging excessive prices, and will continue to act in order to step up enforcement and impose the most severe penalties on those responsible.”