The inter-ministerial committee for pricing (under the auspices of the Ministries of Finance and Economy) has issued a recommendation to cancel all government price controls on bread products, Yediot Aharonot reports.
Currently, several bread products have their prices supervised by the government: regular sliced bread; white bread loaves; sliced white bread; and challah. Unsurprisingly, these are also the cheapest breads on the market—products that are not supervised are up to 300% more expensive.
For example, the average price of 100 grams of bread whose price is supervised is 0.84 shekels. In comparison, the price of packaged pitta bread (made from exactly the same flour) is 1.61 shekels per 100 grams, 91% more expensive. Other products are even more expensive by comparison, such as bread rolls (2.3 shekels per 100 grams), wholewheat bread (2.13 shekels per 100 grams), and spelt bread (3.25 shekels per 100 grams).
According to the inter-ministerial committee, consumption of supervised bread products has dropped by tens of percentage points in recent years, even among the lowest economic percentiles, while consumption of other forms of breads has risen. The committee’s data also indicates that the form of bread most purchased by those in the lowest economic percentiles is packaged pitta bread, even though its price is not regulated by the government.
“With regard to the supervised bread market, there does exist competition between the various bakeries, and therefore, there is no legitimate reason to control prices,” one committee member stated. “This position is also supported by the Competition Authority which will be issuing its own recommendations to the pricing committee. Instead of fixing prices, the committee will be recommending that the government adopt a different form of supervision of market prices, which will include assessment of the profit margins of the main producers.”
On Thursday, the committee issued a statement saying that, “The committee is now awaiting public responses to its recommendations and will be enabling the public to express its opinions. After receiving comments and further data, the committee will publish its final recommendations to the Economy Minister, Orna Barbivay, and to the Finance Minister, Avigdor Liberman. Following a study of public responses, the ministers will make a final decision on the matter, while keeping in mind the effect any such decision will have on the prices of bread products.”