Daily Israel Report

No Tea at This Party: Consumers Rage Over Tea Prices

The price of tea is the latest “price scandal". Activists accused the Wissotzky Tea Co. of overcharging consumers by 300%.
By David Lev
First Publish: 12/1/2011, 3:48 PM

tea cup
tea cup
Morguefile

The latest “price scandal” to set off the anger of consumers is the price of tea – not in China, but in Israel, where activists on Thursday accused the Wissotzky Tea Company of overcharging Israeli consumers by a whopping 300%. A report on Israel Radio Thursday morning said that a thorough investigation of the tea market in Israel and abroad indicated that the prices for Wissotzky's Green Tea were as much 300% higher than in any European country. In Europe, the average cost for a package of 25 tea bags is about NIS 7, while the same package costs NIS 20 to NIS 27 in Israel.

Prices for regular “black” tea, as well as herbal teas, were also far higher than they were in Europe or the U.S., the report said. The report laid the blame for the situation directly at the feet of Wissotzky, which has close to 80% of the Israeli market, according to company figures.

In response, a Wissotzky spokesperson said that the main reason for the price differential was Israel's 16% value-added tax (VAT), which no European country imposes on food items. The spokesperson was at a loss to explain how the 16% charge on a product that was sold for the equivalent of seven shekels in much of the world could have an additional NIS 20 tacked on for a tax that should, at maximum, raise the product's price by two shekels.

Speaking in interview on Israel Radio, consumer activist Shmuel Birnbaum said that consumers were angry – and that organizations that had worked over the summer to reduce the price of dairy products were now taking aim at tea. “It's not just tea, we are overcharged on so many food items,” he said. “We have turned into the world's laboratory for marketing and consumer research, as companies try to figure out what they can get away with.” An alternative to high packaged tea prices, he said, was to buy loose tea from spice stores and outdoor markets – the price of which, he said, was more in line with the actual market price of tea.