Israel Scraps Kashrut Reform, Faces Higher Living Costs
The Knesset has approved a law that repeals a 2021 kashrut reform and alters how kashrut supervisors are employed, a move the Ministry of Finance's Budget Department warns will increase the cost of living. The economic damage is estimated at approximately 600 million shekels due to the anticipated rise in living expenses.
The repealed reform aimed to open the kashrut certification market to competition, breaking the monopoly held by the Chief Rabbinate. The new law, however, reverses this, maintaining the Rabbinate's monopoly and shifting the employment of around 5,000 kashrut supervisors from businesses to corporations linked to local religious councils.
The Ministry of Finance projects that this change will lead to increased supervisor salaries, with the new corporations charging higher fees. These costs are expected to be passed on to businesses and ultimately to consumers, raising prices. The ministry's assessment does not include potential further damages from eliminating competition in imports and the monopolistic use of kashrut requirements to impose stricter standards.
The kashrut reform, passed in 2021 under the previous government but never implemented, intended to transform the Chief Rabbinate from a service provider into a regulator, allowing various organizations to issue kashrut certificates. The new legislation, passed on July 15, 2026, by a vote of 46 to 41, effectively preserves the status quo, preventing market competition and potentially leading to price hikes.
Finance Ministry officials had warned the Knesset about the economic implications before the vote. Their analysis indicated that the lack of competition in the kashrut market directly impacts certification costs, which in turn affects food prices and the overall cost of living. The ministry's concerns stem from two main factors: the continuation of the monopoly, which necessitates dual certification for many businesses catering to diverse consumer trust, and the anticipated increase in supervisor salaries.
