Major Price Hikes Expected on Israeli Shelves Post-Election

Following the recent elections, Israeli consumers are bracing for a new wave of price increases on supermarket shelves. Major international food corporations like Coca-Cola, Nestle, Procter & Gamble, Reckitt, and Unilever have signaled that rising raw material, energy, and transportation costs are pressuring their profitability. These companies are considering further price hikes in 2027, with Unilever anticipating a faster pace of increases than in 2026. Procter & Gamble projects a $1.4 billion impact on profits due to rising costs, and Reckitt warns of similar pressures.

While some cost increases are attributed to genuine global factors like the war with Iran affecting energy and shipping markets, these companies have previously raised prices during other global crises. Experience suggests that shelf prices adjust quickly upward but not as rapidly downward, with cost reductions often benefiting profitability or marketing rather than consumers. The article notes that while consumers see a wide variety of products, a few large companies often dominate the market, leveraging brand loyalty and distribution power to maintain pricing power.

Despite a recent slight decrease in Israel's consumer price index, the country remains one of the most expensive in the OECD, particularly for food and housing, even relative to per capita income. While a strengthening shekel should theoretically reduce the cost of imported goods, this benefit is not always passed on to consumers. Importers often use long-term contracts and hedging, and many local costs are in shekels. The article argues that when the currency weakens, it's cited as a reason for price hikes, but when it strengthens, the savings should be transparently explained to the public.

The piece questions the notion of corporate "profitability under pressure," distinguishing between actual losses, rising production costs, and companies struggling to meet investor profit targets. It asserts that while companies have a right to profit, consumers have the right to question price reasonableness. The article calls for a thorough examination of pricing, considering actual changes in costs, currency exchange rates, and local importer profitability, rather than accepting price hikes simply because a brand is popular.

The incoming government will face a market characterized by high prices, limited competition, and planned price increases by international corporations. The article stresses that the cost of living cannot be a secondary issue but requires sustained policy, not just campaign promises. It argues that economic security is as vital as national security, as families struggling to make ends meet or young couples unable to afford housing are not living securely. The public's demonstrated ability to mobilize for elections should be applied to tackling the cost of living, demanding justification for price increases, especially when global conditions and corporate profits suggest otherwise.