The Israeli Consumer Council - along with the Farmers Association - promotes the development of supervision of the profit margin. Which fruit has been sold for an average of 9 NIS, while the agriculturist gets about 4 NIS for this product?
Israeli consumers pay a high price when buying their fruits and vegetables. A study conducted by the Knesset Research and Information Center has pointed out that fruits prices in Israel have increased between 2005 and 2011 by 60% compared to an average increase of 17% in the EU states. The price of vegetables in Israel has also risen during the same period by 29% compared with a 20% increase in the EU. Prices of fruits and vegetable have continued to increase in 2013.
It seems that the main reason for the high prices of fruits and vegetables is the profit margin between the price the farmer receives for his products, and the price paid by the consumer at the sell point. For the first time in Israel, a comprehensive field study has been conducted, combining two organisms that may shed light on these gaps: the Farmers Association and the Israel Consumer Council.
The test method:
In October 27-29, the farmers have reported about the prices they received for their products through the Farmers Association. At the very same dates, the prices of fruits and vegetables were sampled by Consumer Council's patrolmen who visited 168 marketing outlets and greengrocers all over the country. In this examination conducted by the Consumer Council and the Farmers Association, the profit margin - the difference between the retail price and the price received by the farmer – was calculated.
The examination indicates that there are large gaps between the retail price and the price the farmer receives.
For example:
The profit margin for grapefruit is of 151%; the fruit is sold for an average of 6.45 NIS while the agriculturist gets approximately 2.60 NIS for this product.
The profit margin for avocado is of 125%; the fruit is sold for an average of 9.00 NIS while the agriculturist gets approximately 4.00 NIS for this product.
The profit margin for lemon is of 108%; the fruit is sold for an average of 8.30 NIS while the agriculturist gets approximately 4.00 NIS for this product.
The profit margin for oranges is of 95%; the fruit is sold for an average of 6.70 NIS while the agriculturist gets approximately 3.40 NIS for this product.
In light of the high profit margins, the Israel Consumer Council promotes the supervision of profit margins - along with the Farmers Association.
Adv. Ehud Peleg, CEO of the Israel Consumer Council: "The fact that there are profit margins of hundreds percent among various stores and branches reveals huge and unreasonable gaps, which are therefore unjustified. In the field of fruits and vegetables, there are huge gaps between what the farmer gets and what the consumer pays, and these gaps have led the consumer Council to the initiative for the development of supervision. Prices jumping by many tens and sometimes hundreds percent in comparison with the price in the market, show that the brokerage links of the marketing chain have lost all restraint, and there is no other option than having the government control the price gaps they charge. Both consumers and farmers suffer from the current situation. After the implementation of the amendment, both consumers - who will allow themselves to buy more fruits and vegetables and eat healthier, and farmers – who will see a tremendous raise in demand for their products – will benefit. "
