Israel Halts Flagship 'State Basket' Project After Six Months and $6.7 Million Investment

Israel's "State Basket" initiative, a pilot program aimed at lowering consumer prices by leveraging collective purchasing power, has been halted after six months and an investment of 25 million shekels (approximately $6.7 million). The program, which involved 112 products sold online and in 54 Carrefour stores, reportedly led to an 8.4% decrease in the prices of the selected basket items compared to a 3% drop in overall consumer goods during the pilot period. The Ministry of Economy stated that the gap between the "State Basket" price at Carrefour and the average price at other surveyed chains was about 32.5%.

Minister of Economy and Industry Nir Barkat decided not to extend the pilot program, citing the upcoming government transition. He explained that it would be inappropriate to make a decision that would obligate the next government to continue the project. Barkat noted that the pilot revealed challenges in fostering aggressive and sustained price competition among major market players, highlighting the need to examine existing incentives for price reductions and the effectiveness of competition for consumers.

Despite the reported success in lowering prices, Barkat pointed out that only one chain, Carrefour, participated in the initiative. He praised Carrefour's decision to join and reduce prices on the 112 products. The Ministry of Economy will compile a comprehensive report detailing sales data, household savings, price trends, project costs, and key lessons learned. This document will be presented to the incoming government to inform decisions on whether to continue, expand, or develop a new model based on the "State Basket" concept for increasing competition and reducing the cost of living.