There's no denying it - Israel is expensive.
Tel Aviv, the country's biggest tech hub, was named the priciest city in the world by the Economist Intelligence Unit (EIU) for the first time in 2021, beating out notoriously costly destinations like Singapore and Paris.
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So how did this city rocket from 2020's designation of fifth place to hold the highest cost of living globally?
The answer may lie in locals' shopping baskets.
Alongside a strong shekel, the EIU's data attributed Tel Aviv's elevated ranking to significant increases in around 10 percent of local prices for goods last year, with groceries leading the charge in sky-high costs.
But the problem is not merely localized to Tel Aviv – in December, Osem, one of Israel's largest food distributors, announced it would raise its prices due to an increase in operating and raw material costs.
This very well could be the case – Omer Moav, an economics professor from Israel's Reichman University and the UK's University of Warwick told i24NEWS that prices are rising not just in Israel, but all around the world.
"There is something that happens now that causes prices to go up… this is probably the result of the rise in gas prices, fuel prices in the world chain of supply… these are global events," Moav, who co-presents the hit podcast "Osim Hesbon," or "Making an Account," said.
This worldwide supply chain crisis could be affecting certain production factors in Israel, prompting potential increases in operating costs and affecting the prices of goods.
Due to these supply chain issues, Moav explained how brands may have to pay higher costs, but also should take into account what price increase would be justified.
In Israel, news of Osem's planned price hikes sparked widespread outrage and a series of protests against the Nestle-owned food giant.
Guy Lerer of Reshet 13 television started a boycott initiative against Osem on Facebook with a viral post shared and liked by thousands.
"Do you want to break the high cost of living? Do you want to show the companies that they cannot celebrate at our expense all the time, without there ever being a reaction?" the message said.
"Stop buying Osem pasta. Simple as that. Buy the cheaper pasta."
A number of government officials also joined the public in pushing back against Osem - Israel's Finance Minister Avigdor Liberman and Economy Minister Orna Barbivai wrote to the country's food distributors cautioning them not to raise prices unnecessarily.
After weeks of calls to boycott the company, Osem relented, at first postponing the planned increases, then scrapping them entirely in early February.
Price hikes for food items are an all-too-familiar pain for Israel's consumers, as the recent Osem pushback showed.
This boycott did not mark the first instance of Israel's food demonstrations, and it likely will not be the last - such events are long in the making and can be observed over a decade back.
The most notable widely-publicized protests against rising food prices in Israel first started with the 2011 cottage cheese boycott, when outraged consumers saw costs of the dairy product soar around 45 percent over the course of three years.
Complaints against price hikes on Facebook snowballed into a larger protest against the country's high cost of living, with tens of thousands of Israelis joining the movement.
Dr. Alex Coman, an economist with the Academic College of Tel Aviv-Yaffo who specializes in value creation, told i24NEWS that the effectiveness of the cottage cheese protest was achieved in part due to the qualities of the product itself.
"That was an ideal product because it's perishable – it has a very short shelf life," Coman said.
"So that's an excellent product to boycott because the supplier, Tnuva in that case, could see tons and tons of cottage cheese just expiring and being thrown down the drain."
Indeed, following mass unrest and a series of large demonstrations, the cost of the dairy product was lowered.
However, Israel's consumer woes resurfaced once again in 2014 - this time on the costs of Israel's cherished chocolate pudding brand, "Milky."
Outrage ensued when Naor Narkis, an Israeli expatriate living abroad at the time, anonymously uploaded a photo to Facebook which showed how a similar dessert in Germany sold for around a third of its Israeli price.
He launched the Facebook page "Olim L'Berlin" – using a Hebrew term that loosely refers to immigration to Israel - and urged those frustrated by soaring prices to move to Germany's affordable capital instead.
In just four days, the post was seen by over a million people, and Narkis told Der Spiegel that thousands of Israel's netizens sent him messages asking for advice on immigrating to Germany.
Though the Milky protests did not result in price declines, the pudding emerged as a new icon symbolizing price discontent and sparked national dialogue on Israel's high cost of living.
Although such protests can be effective when consumers focus on one brand, even when some victories are achieved, these movements don't always address the root of the problem – a systemic mismatch within Israel.
"Prices are the result of supply and demand, and in Israel, the supply is noncompetitive," Coman said, adding that demand is also complacent.
Israel is a smaller country, where leading brands often only have a single representative, which "for a strong brand basically means that they can charge monopoly prices," the expert added.
Coman said that one way Israelis can avoid paying these high costs is by not always purchasing by brand - looking instead for private-label goods, which are often accompanied by a smaller price tag.
He also stressed that "the government must make it much, much easier for people to import" the same products sourced from countries with lower GDPs to increase competition.
"You can buy Coca Cola, say in Turkey, it's exactly the same product - only you can buy it much cheaper, and you should be able to bring it to Israel" without unnecessarily bureaucratic processes, Coman explained.
When Moav was asked about the recent Osem protest, he echoed calls to increase competition and suggested an alternative approach to demonstrations against Israel's high cost of living.
"The issue is – who do you boycott?" Moav asked.
"If you're looking for baddies, this would be someone like Schestowitz" or other importers within Israel.
Schestowitz is the exclusive Israeli importer for a number of overseas brands, and the company was probed by the Israel Competition Authority for efforts to stifle parallel imports by reporting the goods to Colgate-Palmolive Co.
"They behave like a mafia, in the sense that they do anything that they can to prevent competition," the professor added.
He said that toothpaste – when it is purchased where it is produced in eastern Europe - will usually only cost a few shekels, but the product can be sold in Israel for several times that amount due to the environment created by importers.
"This is someone that just has this huge monopoly power… If you want to really punish someone, these are the importers that try to block competition," Moav said.
"Osem is a different story – if one wants to buy a pasta that was not produced by Osem, there are alternatives."
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The real key to resolving Israel's price problems lies with what the government does in regards to competition, an issue which he said can not be resolved by imposing price controls.
"The right thing that the government is doing is trying to open the economy for more competition - open the borders for free imports, to reduce tariffs... and simplify regulation and bureaucracy," Moav explained.
He stressed the importance of a balanced "adjustment in regulation - keeping the safety of the public, but allowing easier competition."
This article was first published by i24NEWS.
