Economy Minister Nir Barkat comes out swinging against global soft drink titan, demanding financial transparency and justification for price hike from Coca-Cola’s Israeli branch.
By Lauren Marcus, World Israel News
As the cost of living in Israel soars, with prices for everything from housing to milk soaring while wages stagnate, the Minister of the Economy has set his sights on one specific company that he claims is fleecing the Israeli consumer: Coca-Cola.
Minister Nir Barkat (Likud) has publicly declared that he believes the soft-drink powerhouse is taking advantage of Israelis,. “The days of bullying are over,” he wrote on Twitter.
His office has sent an open letter to Nir Levinger, the CEO of Coke Israel, demanding greater transparency into how its prices are determined in the country.
A senior economist from Barkat’s ministry, Dr. Yonatan Bezalel, informed Coke that the Israeli government is intending to “supervise” the product – meaning that it will set a maximum price for Coke and ban the company from selling the beverages above that rate. This would mean that the government essentially subsidizes the product for consumers, ensuring that it will remain affordable.
There is only one company that acts as an authorized distributor of Coke in Israel, which functions as the Israeli branch of the global titan, and therefore it has a monopoly over pricing for the soft drink in the Jewish state, Bezalel wrote in the letter, according to a Ynet report.
“From the information we have, it appears that the prices of the main Coke products that you produce and market are the most expensive in the category. In a comparative examination with international markets, there are indications that the cola products in Israel are among the most expensive in the world,” he wrote.
He noted that after Finance Minister Bezalel Smotrich slashed a tax on sugary drinks, the price of Coke should have gone down, or at the very least remained stable. But instead, the company decided to implement a price hike of 6.7 percent.
Bezalel concluded the letter by demanding that Coca-Cola Israel turn over its financial dealings from 2018 through 2022 and provide a justification for the price increase.
Israeli Twitter users praised Barkat’s move, calling him “the right person in the right place” and wishing him good luck.
“It’s about time,” another Israeli replied, thanking Barkat.
But Barkat’s crusade to stabilize Cola prices wasn’t embraced by all those fighting for a lower cost of living in Israel.
“I admit that the first thing that went through my mind was that maybe he was confused, or that…this was a joke. But, apparently not,” Rachel Gor, an attorney and the director of the Lobby 99 public advocacy group, told Ynet.
“It’s quite amazing…that just a few weeks ago we had a tax on sugary drinks in order to reduce costs on the public health system resulting from diabetes and other diseases caused by excess consumption of sugar…and now we have a government that’s proposing to subsidize Coca-Cola as a basic consumer good.”
Recently, the prices of gasoline and basic dairy products have spiked. On Monday, prices for subsidized milk rose by more than nine percent.
A summary of price increases since April 2022, published by Walla, noted that the price of a kilo of onions rose by 42%, frozen chicken by 13 percent, and avocados by 62 percent in a one-year span.