Israel increasingly resembles an economy captured by monopolies, where a small circle of powerful interests dominates key sectors and ordinary consumers foot the bill.
From agri-food to retail, and from car imports to distribution networks, entire markets are effectively controlled by a handful of families © Mena Today
Israel increasingly resembles an economy captured by monopolies, where a small circle of powerful interests dominates key sectors and ordinary consumers foot the bill.
This week, Israeli Finance Minister Bezalel Smotrich announced plans to tax “excess” profits made by commercial banks, accusing them of exploiting the public after years of sharp interest rate hikes.
The proposal targets profits more than 50% above banks’ average earnings between 2018 and 2022, an implicit admission that Israel’s financial sector has benefited disproportionately from policies meant to fight inflation.
The Bank of Israel raised interest rates aggressively from 2022, pushing them from near zero to 4.75% before modest cuts this year. Banks passed higher rates swiftly to borrowers, while delaying or limiting gains for depositors. The result: record profits and a public squeezed by higher borrowing costs.
But banking is only part of the problem. From agri-food to retail, and from car imports to distribution networks, entire markets are effectively controlled by a handful of families. Competition is stifled, prices remain high, and alternatives are scarce.
Smotrich himself acknowledged that monopolies “do not allow for fair competition,” even as his government has long tolerated their dominance.
Israel’s high cost of living has pushed consumers to shop abroad, on platforms like Amazon and AliExpress, simply to escape inflated local prices. That alone says much about the failure of the domestic market.
In this system, reforms come late and timidly. Monopolies remain entrenched. And the Israeli consumer, as always, is left paying more for less.
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