Should the Shufersal chain ‘impose taxes’ on the public?

The rabbi’s opening post

Should the Shufersal chain ‘impose taxes’ on the public?

Posted on 28/5/2007

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Should the Shufersal chain ‘impose taxes’ on the public?

On the recent festival of Shavuot, I visited Yeruham, and they told me about the Shufersal chain, which opened a branch in Yeruham, where prices are very high. A protest is being organized there, along with demands to lower prices.

And then I found the following article

http://www.nrg.co.il/online/16/ART1/578/045.html

which describes similar complaints about the Shufersal chain throughout the country.

The main problem is that the chain divides its branches into three types: Big, Deal, and Sheli. These are three price levels, with ‘Sheli’ being the highest-priced format, and it is located in neighborhoods and development towns (including Yeruham). In Yeruham they are protesting and considering strikes and boycotts. The goal is to cause the chain to turn the local branch into a ‘Deal’ instead of a ‘Sheli,’ and thereby lower the prices.

The journalist assumes that there is a cynical exploitation of distress here, but I, for my humble part, do not think so.

As I myself explained during Shavuot to the people I spoke with, and as I have now also seen in the article, the policy is that each branch must sustain itself, and therefore the greater the volume of purchases, the more one can reduce the profit margin, and consequently the prices as well. ‘Deal’ branches are enormous, and are located in such a way that their purchasing volume is tremendous, and therefore their prices are low. The journalist, too, is apparently of the breed of professional victims, who see exploitation and deprivation everywhere, and think that business owners are supposed to support the weak. This, of course, connects to the discussions of communism and socialism and the brotherhood of nations. If there is a policy that each branch is supposed to sustain itself, then it is only reasonable and legitimate to set price levels according to purchase volumes. This is a legitimate business consideration, not deprivation.

The other option is to say that they should lower prices in Yeruham and Beit HaKerem at the expense of the residents of Tel Aviv. That is, the chain would impose taxes, de facto, on the residents of the central and larger places (not necessarily wealthy ones, by the way; see Talpiot Center as opposed to Beit HaKerem), who would bear the burden of the neighborhood residents.

But that is not the role of a business chain, but perhaps of the government. If the government wishes, let it subsidize the prices in Yeruham. Why are we demanding this of a business chain?

Is that even legitimate? Can a business chain (morally speaking) decide to raise prices in Tel Aviv in order to subsidize the residents of Yeruham? And what about the poor of Tel Aviv? Why should they not benefit? More generally, does Yeruham share with Tel Aviv the advantages that its residents receive (such as discounts on activities and studies, and the like)? After all, the residents of Tel Aviv already subsidize the residents of Yeruham through the government with quite a bit of money, so why should they have to do so also in a way that does not pass through the Knesset and the government?

Admittedly, one should not be overly naive. I assume that one of the reasons the chain leaves the situation as it is is that it exploits the fact that the residents of Yeruham have no choice but to shop there (many of them do not have a car to travel to Be’er Sheva, and there is no other supermarket in Yeruham). But they do this even in a neighborhood like the one in which I myself live, in Petah Tikva, may it be rebuilt and established speedily in our days, amen. The idea is that whoever wants the convenient privilege of shopping close to home without driving to a shopping center pays more.

Thus there are two components in the chain’s decision: the legitimate business consideration that each branch should sustain itself, and the decision that the residents of Tel Aviv are not supposed to support the residents of Yeruham. Therefore, in my assessment, both practically and morally, such a struggle can at most yield a price reduction (the result of preventing the exploitative component in the aforesaid policy), but not a conversion to ‘Deal’—that is, not the cancellation of the policy of not imposing taxes on the residents of Tel Aviv.

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Source (the “Stop Here, Think” forum): http://www.bhol.co.il/forums/topic.asp?topic_id=2215053