As the world watches the uprising in the Arab world, another popular revolt, albeit of a different nature, is taking place in Israel.

What's got Israelis in an uproar? The same thing that raises the ire of many average American citizens: the high cost of living. Israelis want affordable housing, food, gas, goods, and services. Or, as they put it, social justice.

Blame the Cottage Cheese

It all started back in June, when Israelis joined forces on Facebook to lower the price of cottage cheese. Israelis love their cottage cheese. Consumers boycotted the product for a few weeks. Eventually, the boycott worked and the dairies dropped the prices of cottage cheese and other products.

As it turns out, cottage cheese was but a symptom of a much larger problem, and just the beginning of huge expression of popular dissent over the regulation issues that have led to prohibitively high costs in the country.

During the next month, many students and young middle-class Israelis protested high rents and housing prices by moving into tent camps they raised in many of Israel's major cities, including Tel-Aviv and Jerusalem. They also organized several large peaceful demonstrations.

Other than affordable housing, they want the government to change the system in which a few tycoons and families have a stranglehold over the Israeli market. They want to see more competition and regulation.

Tycoons in Control

The Israeli market has one of the tightest concentrations of corporate and economic power in the Western world. Ten families control 160 Israeli public companies, the Bank of Israel found. About 16 tycoons, families, and conglomerates control half the market, often through a pyramid structure, according to Israeli parliament findings.

These controlling families have their tentacles in everything from financial services to media to bread. It's a thinly veiled oligopoly. As a result, Israelis pay much more for goods and services than other developed nations and have one of the largest gaps between rich and poor among industrialized countries.

The cottage cheese issue is a good example of how this concentration of power hurts the people.

There are just three dairies that control the market, and they've been hiking prices for a while, enjoying the protection of the high tariffs imposed on imported dairy products. In fact, those same dairies also export their products to Europe and the U.S. But foreign customers pay 50% less than Israelis pay for the cottage cheese made in their own backyard, which is more than odd considering the cost of transportation.

Lowering Prices One Boycott at a Time

Seeing as the government isn't doing enough to protect the market from oligopolies, the consumers took it upon themselves. On the hot seat after cottage cheese was Israel's largest supermarket chain, Nochi Dankner's Shufersal (or Super-Sol), whose market share of bar-coded foodstuffs is a staggering 37%.

The demonstrators demanded a substantial reduction in prices at the chain. About half the public said they would join in the boycott if it went ahead. Shufersal's management negotiated with the protesters and has agreed to a 20% cut on 30 leading food products, including bread, milk, eggs, and baby formula, for at least a year. Another large supermarket chain, Mega, controlled by Blue Square (BSI), immediately followed suit.

Now the protesters are organizing a million-person march for Saturday -- no small feat for Israel's population of roughly 7 million. After that, they will begin the so-called 10 plagues initiative, which will target one controlling family/tycoon at a time. The first target is Yitzhak Tshuva and his Delek (DK) gas stations.

Does Social Protest Work?

Last month, Prime Minister Netanyahu promised he would look into oligopolies in the market. But with many of the interested parties also holding positions in the government and the Israeli parliament, and with strong lobbies by many of the groups, reforms won't be easy to come by.

While the American public doesn't have the same concerns as Israelis do, they have others. It's interesting to contemplate what would happen if the U.S. took a cue from the peaceful consumer revolt in Israel. The march of the unemployed, for example, could see millions upon millions in the streets, demanding jobs.

Motley Fool contributor Melly Alazraki does not own any shares in the companies mentioned.


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22 Comments

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connieusa27

American taxpayers subsidize Israel's prosperity.

September 03 2011 at 6:38 AM Report abuse rate up rate down Reply
century21grand

Demanding jobs just shows how horrible AOL has become since The Huffington Post took over
Try demanding a job from The Huffington Post. You can't legislate desire.

September 02 2011 at 11:34 AM Report abuse rate up rate down Reply
patsunikbutik

In Israel, they need entrepreneurs, like we have in America. A lack of these, is fertile ground for oligarchy, where only a few moguls are in control, leading to higher prices everywhere & GREED.

September 02 2011 at 11:29 AM Report abuse rate up rate down Reply
dgframer

In order to create jobs, you have to create demand. If you want Americans to work, buy American.
An image that is burned into my brain is of a couple carting out two carts full of stuff from Walmart. A bumper sticker on their van said "Real Americans, Buy American UAW". I often wonder how much of what they had just bought was made in America.
That incident happened when the unions for the textile workers were fighting for their jobs. I did not hear the UAW supporting those efforts.
My point is that most people do not care about any job but theirs and maybe a family member.

September 02 2011 at 10:28 AM Report abuse +2 rate up rate down Reply
jetta5701

The days of keeping the little man down is going to be over, all people everywhere are tired of these money mogrels who never have enough and just laugh at the rest of us.

September 02 2011 at 9:41 AM Report abuse +2 rate up rate down Reply
1 reply to jetta5701's comment
man4trth

I’m laughing and always will be until you figure out that no one but you will be able to help yourself. No evil group is keeping you down and no group will lift you up, it’s all on you.

September 02 2011 at 10:46 AM Report abuse rate up rate down Reply
Robert G

HOW DO YOU DO THAT? EVER AMERICAN CITIZEN WOULD HAVE TO GO ON STRIKE FOR AT LEAST ONE 24 HOUR PERIOD TO GET ANYTHING DONE. IMAGINE IS NOBODY IN AMERICA REPORTED TO WORK FOR A 24 HOUR PERIOD AND JUST STAYED HOME. WOW !! I know it wouldn't happen I'm just saying though.

September 02 2011 at 9:31 AM Report abuse rate up rate down Reply
wwmiddlebury

$3.075 billion scheduled to be subsidized to Israel in 2012 , unchanged , despite all the budgetary cutbacks on the American people.

September 02 2011 at 9:23 AM Report abuse +8 rate up rate down Reply
1 reply to wwmiddlebury's comment
man4trth

The cut backs are just a reduction in the planned increase, I thought everyone knew that. The fed budget will increase 7% instead of 8%.

September 02 2011 at 10:48 AM Report abuse +1 rate up rate down Reply
stbrack

I was with the writer for most of the article until they talked about our unemployed. First most of the unemployed are just plain and simple sandbaggers taking advantage of the system. The proof of that is the fact that the vast majority of them find work within two weeks of their benefits expiring. Second what good would a protest do, how is a bunch of complainers going to persuade a business man to hire them just by marching somewhere? Maybe the author thinks the government will give them government jobs, but that will take jobs away from the private sector at taxpayer expense. Perhaps the author is thinking the government should give the unemployed jobs doing nothing more than collecting checks but we already have that, it’s called unemployment.

September 02 2011 at 8:15 AM Report abuse rate up rate down Reply
scottee

how do we do that? it's not that prices are higher, it's our dollar is worth less. you can thank The Fed for printing and diluting our dollar. how do we reverse this and restore our dollar's value?

September 02 2011 at 8:12 AM Report abuse +1 rate up rate down Reply
1 reply to scottee's comment
andrika16

Where have you been living that prices haven't been rising? The cost of electricity to food prices have all been going up. Google "rising food prices in US" and you will get a tremendous amount of hits from well-respected sources. Yes our dollar is worth less, however prices are also on the rise reducing everyone's buying power (not to mention that salaries for regular workers has been stagnant for the past 10 years.)

September 02 2011 at 10:13 AM Report abuse rate up rate down Reply
mikcl1

This is what we need to do in this country, particuarly with the greed stricken oil companies, big oil is chocking the life out of our country,allthier excuses for high fuel prices are lies, there is nor ever has been a shortage of oil,just a bunch of greedy rat bas***** controlling it.
It would be interesting to see what would happen if every one would just stay home for a week and buy no fuel,let theses liars choke to death on thier oil.

September 02 2011 at 8:07 AM Report abuse rate up rate down Reply