Israel Eases Import Rules to Lower Grocery Prices, Boost Competition

Israel's Ministry of Economy has finalized the distribution of quotas for duty-free food imports through 2027, aiming to stabilize the retail sector and curb the rising cost of living. The new government incentives are designed to foster greater competition within the domestic market, diminish the influence of monopolies, and ultimately reduce retail prices for products including vegetables, cheeses, wines, and groceries.

The plan grants duty-free import rights to entities managing major retail chains such as "Osher Ad," "Yohananoff," and "Tiv Taam." By enabling direct purchasing without intermediaries and eliminating customs duties, these chains can offer more competitive pricing against established brands. This is particularly expected to impact the frozen vegetable market, previously dominated by a few suppliers like "Sanfrost."

"Osher Ad" and "Yohananoff" will receive identical import benefits for European goods, including tens of tons of frozen peas, beans, and other vegetable mixes, along with significant quantities of natural grape juice. These imports are intended to allow the chains to offer more attractive prices and lessen their reliance on domestic monopolistic producers.

The import division of "Tiv Taam," Israco, secured the broadest range of quotas. In addition to frozen vegetables, Israco is authorized to import duty-free olive oil, European and British cheeses, pickled cucumbers, vegetable mixes, and wines. This positions "Tiv Taam" favorably against competitors like "Rami Levy," "Victory," and "Mahsanei Hashuk."

However, experts express caution regarding the extent of potential price reductions. Concerns remain that rising operational costs, including electricity, fuel, port logistics, and municipal fees, might absorb any retail discounts. Furthermore, established major players like Unilever and Sugat, which hold dominant market shares in sugar, rice, mayonnaise, and breakfast cereals, have also received additional duty-free import quotas for raw materials and canned goods.