Study shows sweet substance 3.5 times more expensive in Israel than in US, points to ‘over-centralization of the industry and government policy’ as main causes
Calcalist
The average price of honey in the United States (about NIS 6 – $1.6) is 28% of the average price of honey in Israel (about NIS 21 – $5.6), according to a report released by the Jerusalem Institute for Market Studies (JIMS) ahead of Rosh Hashana.
In Britain the sweet substance costs half of what it costs in Israel, with the average price standing at some €2.1 (NIS 10.7). In fact, in Britain one can find honey which costs 16% of the average price of honey in Israel. In addition, the import prices of honey from countries like Canada, Mexico, Argentina and China are about 15% of the average price in Israel.
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JIMS economist Keren Harel-Harari notes that „40% of the annual consumption of honey in Israel is consumed around the High Holidays, and mainly around Rosh Hashana. We are talking about 1,500 tons consumed in one month, worth about NIS 60 million ($16 million). The average Israeli consumes an average of 300 grams (10.5 ounces) of honey during this period.”
Harel-Harari claims that the high prices are a direct result of an erroneous government policy and over-centralization of the industry, similar to the situation in the milk and cheese industry.
Honey prices in Israel climbed 26% from 2005 to 2010. According to the Honey Council, two-thirds of the honey price are made of the marketing difference collected by the marketers and chains.
According to the report, „scandalous customs” prevent import competition. The tax on a jar of natural honey is about NIS 17 and the tax ceiling reaches 255% – the highest among food products.
In addition, for reasons of non-profitability, Israel imports honey from only seven countries out of a list of 56 countries approved by the European Union.
The study also says the Honey Council provides duty-free import quotas to the industry’s strong bodies only, helping create a monopolistic behavior and preventing small beekeepers from competing.
The report concludes by noting that the industry suffers from over-centralization: The Yad Mordechai Beehive, jointly owned by Kibbutz Yad Mordechai and the Strauss Group, controls more than 50% of the market.
The JIMS suggests reducing and cancelling the taxes on honey imported to Israel in order to increase imports and the number of countries from which honey is imported.
In addition, marketers are advised to mark the honey’s country of origin on the jars. The institute also demands an investigation into the duty-free quotas provided by the Honey Council and recommends a transparency check of the Honey Council and the criteria it is guided by.
The Honey Council said in response, „The price figures presented in the report based on a study are groundless. The Honey Council will consider taking legal proceedings against the institute.”
