The Special Committee on Young Israelis, chaired by MK Naama Lazimi (Labor), convened on Monday for a follow-up meeting on the issue of the rising cost of living, and particularly food prices. committee chair MK Lazimi said, “Israel is presently the most expensive country in the OECD in terms of food prices. The prices in Israel rise—while they are dropping around the world. The Government has failed in its job to maintain the quality of life in Israel. In July 2023, Israel was ranked in first place in the developed world in terms of cost of living. In the food sector, the gaps relative to the world are particularly large—the basket of food products in Israel is more expensive by 36%, on the average, than in OECD countries. In basic foodstuffs, the gap reaches 73%. The reason does not lie in the production costs, but rather in a concentrated market structure and lack of effective supervision.”
Bat Chen Rotenberg of the Knesset Research and Information Center said that in the past seven years, the Consumer Price Index (CPI) had risen by 18.9%, the food price index without fruits and vegetables had risen by 22.8%, the fresh vegetables price index by 32% and the fresh fruit price index by 53.5%. The food price index was stable from 2018 to the start of 2021, and afterwards an increase was recorded, among other things due to supply barriers resulting from the COVID-19 crisis and the Swords of Iron war, as well as an increase in prices of imported inputs, such as seed and animal feed, due to Russia’s invasion of Ukraine. Since the outbreak of the war, the food price index has risen at a faster pace than the CPI. The indices of fresh fruit and vegetable prices fluctuate, and are subject to influences of climate and worker shortages.
From January 2022 to June 2025, the global food commodity price index dropped by about 5.7%, versus an increase of 13.2% in the output price index of the food industry in Israel for local destinations, an increase of 16.3% in the consumer food price index in Israel, and a 10% increase in the input price index of the agriculture sector in Israel. Rotenberg noted that the global food index was measured in dollars, whereas the indices in Israel are measured in shekels, and for this reason changes in the shekel exchange rate could make a difference.
Dror Strum, CEO of the Israeli Institute for Economic Planning (IEP), said that until 15 years ago, Israel was less expensive than abroad—and since then we have been becoming more expensive in every comparison to the OECD, and this is not explained by the increase in the GDP. The main culprits, he said, were the manufacturers and the retail chains, both of which operate as monopolies. Strum proposed to declare the main monopolies operating in the food manufacturing market, and to require them to present financial data regarding their monopolies. He proposed further to determine that a gap of more than 20% relative to identical or similar products in the EU would be considered an unfair price, and said that [the Government] should work to dismantle monopolies.
National Economic Council Chair Prof. Avi Simhon replied, “The Government is battling against the cost of living unsuccessfully, and the new import reform still hasn’t produced results. This is a Sisyphean, long and ongoing task. We believe in competition—and the more we remove barriers to competition, this will lead to lowering prices.”
Israel Farmers’ Federation Secretary General Uri Dorman said that it was profit margins [of retailers] that created the high prices, and these should be addressed.
Itamar Avitan, head of the Strategy Department at the Histadrut, said that “aggressive action” should be taken against monopolies, and then the market should be allowed to operate competitively.
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