'Cereal Law' Could Cause Unemployment, Union Says

A new law designed to increase competition could cost thousands of Israelis their jobs, union officials fear

Yaakov Levi ,

Israeli supermarket (illustration)
Israeli supermarket (illustration)
Flash 90

A new law that will limit the reach of large companies on Israeli supermarket shelves may end up causing mass layoffs, organized labor officials believe. Under the so-called “cereal law,” large companies will be limited to no more than 50% of shelf space for specific products in Israeli markers.

In addition, markets will be required to install systems that will indicate in real time when prices rise or fall on a product, eliminating the common situation where a consumer is charged more for a product because the sign beneath it on the supermarket shelf has “expired.”

The law may be good for consumers, but it may be less positive for workers, say union officials. Over the weekend, reports said that food giant Osem was letting go 23 of its workers currently employed in its marketing department. If the report is correct, it would the largest dismissal of workers at the company in nearly a decade.

The workers involved are employed at setting deals and sales with large supermarket chains, including the positioning of products on store shelves, giving out coupons, etc. With less activity in the markets and less shelf space for Osem, however, there will be less for the workers to do – hence a reduction in manpower.

According to Eliezer Blau, a top union official, the Osem move could be the beginning of a wider trend, and “will threaten the incomes of thousands of workers, the vast majority of whom are 40 and over and who for many years contributed to building the company. I have indicated to the directors of Osem that this move could be grounds for a work dispute,” the precursor to a strike in Israel.

Workers at many other large food companies could be endangered as well, and the vast majority are unlikely to find other work, because of their age and skill set, he added.

In a statement to the Calcalist business daily, which first reported the story, Osem said that “due to the new law's restrictions there will be a need to change the job description of about 20 workers. We have no intention of closing the department in question, and we are searching for alternative jobs, in collaboration with the workers themselves.”