Behind the Headlines: when the Passover Shelves Go Up in the Stores, So Do the Prices

Passover price-gouging is nearly as old as the holiday itself.

The Talmud (Pesachim 30a) tells that it had been customary for Jews to break their pottery dishes and buy or make new ones for Passover. But the price of pottery and clay would rise so steeply just before the annual celebration of the Exodus that it became a hardship for many Jews to buy a new set each year.

So the rabbis decreed that Jews no longer needed to destroy and replace a set of dishes, but just keep one set solely for Passover use and reuse it every year.

More recently, around the turn of the century, kosher beef prices rose so steeply before Passover that only the threat of a boycott convinced producers to lower their prices.

Prices go up, say the manufacturers of packaged goods, because more rabbinic supervision is needed to ensure that products are kosher for Passover than is needed the rest of the year.

Distributors of kosher food say they are just passing along the higher costs they are charged by manufacturers.

Retailers proffer the same explanation, though some small grocers open up separate stores near their main outlets to sell Passover food rather than go through the process of ensuring that no chametz remains in their main stores. This could add to the price of the Passover foods they carry.

Some of the steepest price hikes occur on fresh products, like meat, poultry and dairy.

“Chicken goes up 25 percent during Passover. Eggs go up 25 to 30 cents, so do carp and whitefish,” observed David Pollock, associate director of the New York Jewish Community Relations Council.

‘THEY JUST WANT TO MAKE MORE MONEY’

Max Wilson, a retired butcher from Brooklyn, was in the business for 30 years and learned the trade from his father. Each of those years “the price of meat went up before Jewish holidays without fail.”

Manufacturers “say it costs them more for Passover, but that’s a lot of baloney,” he said. “From the big guy all the way down to the little guy, they just want to make more money.”

After all, he pointed out, “meat and poultry is kosher for Passover all year round.”

This is the first year Wilson has ever seen prices for kosher poultry and meat stay stable just before Passover, he said, because of a new program initiated by New York City Consumer Affairs Commissioner Mark Green.

With the backing of 22 Orthodox, Conservative, Reform and Jewish community organizations, Green convinced 34 manufacturers, wholesalers and retailers not to raise their prices above mid-February levels.

The second part of the effort is the distribution to consumers of cards that list mid-February’s average price of 27 products, from Michigan pike to boneless veal shoulder roast, in independent grocers and supermarkets in the city.

While many participants in this community effort are hopeful about its impact, not everyone agrees that it will be a complete success.

And a campaign of this type would probably not work outside major cities with large Jewish populations, which account for enough of the customer base in cities like New York to encourage retailer cooperation.

According to Rabbi Ephraim Sturm, executive vice president of the National Council of Young Israel, manufacturers are jacking up their prices earlier in order to adhere to the mid-February price baseline. He would like to convince kosher consumers to buy Passover food well in advance of the holiday.

A NEED FOR MORE COMPETITION

“Everybody gets hysterical and overbuys,” he said, noting that “60 percent of the products he or she buys for Passover can be bought months before.”

Others think the solution to keeping prices reasonable is greater free-market competition among manufacturers.

“The more companies which go kosher and produce kosher-for-Passover goods, the more competition there will be in the market, which keeps prices low and really stabilizes the market,” said Rabbi Menachem Genack, rabbinic administrator for the Union of Orthodox Jewish Congregations of America, whose O.U. certification is familiar to many kosher shoppers.

“If the profit motive is there, price-gouging will be there, and pledges won’t alleviate it.”

The range of Passover products available today is greater than ever: from traditional staples, like matzah ball mix and gefilte fish, to chocolate-nut macaroons, blueberry muffin mix and even a Cheerios cereal imitation made with matzah meal.

But the extensive range of Passover goodies itself has little impact on prices, according to another O.U. kashrut expert, Rabbi Shmuel Singer.

“It hasn’t changed anything for the companies that charge unfair prices,” he said.

The food most central to the observance of Passover, matzah, is a product category long beset by allegations of price-fixing, and one where there are too few competitors for natural market forces to bring the price down.

Last year the New York City Consumer Affairs Department found that a five-pound box of Manischewitz matzah cost anything from $3.99 to $9.99.

THE MATZAH MARKET MONOPOLY

Manischewitz, which also produces cakes, cookies, fish and soup, generates 43 percent of its $34.6 million in annual sales from matzah and is the largest matzah maker in the nation, according to a recent article in The Wall Street Journal.

This year, the company has taken New York’s “Passover Pledge” not to raise prices before the holiday.

But Manischewitz was indicted last year for allegedly fixing the price of matzah with Streit’s and Horowitz Margareten, two other major brands, from 1981 to 1986.

The matzah maker could be fined up to $1 million.

Manischewitz purchased Horowitz Bros. in 1986 and the rights to the A. Goodman and Sons label in 1983.

That gives Manischewitz three of the four major matzah brands and a 90 percent share in the $20 million Passover matzah market. With such a monopoly, matzah prices are unlikely to fall from the pressure of competition.