Unfair Competition?


Chanukah starts this weekend, but for some American Judaica merchants and artists the holiday season was over weeks ago.
In fact, they say the Chanukah gift-buying season, traditionally a major source of their annual sales, never began.
Besides the U.S. economic recession affecting many businesses, they are blaming another culprit: the proliferation of Israel expos and fairs promoting Israeli retailers and craftspeople being sponsored around the country by synagogues and Jewish community centers, with millions of dollars at stake.
"Chanukah already went kaput," said Dahlia Hougah, a Philadelphia Judaica storeowner. "It’s absolutely related to the expos."
"Our Chanukah is gone," agreed Michelle Lohmiller, of Judaica Art Is Ltd. in Jamaica Estates, Queens.
Judaica storeowners and artists in the U.S., while stressing their unyielding support for the State of Israel, say that what started as a noble idea to help struggling Israeli vendors and artists decimated by the vanishing tourist trade has turned into an unregulated industry.
Their list of complaints include:
The growing number of Israeli fairs has severely cut into their livelihood. They note with irony that they have been selling Israeli-made products for years, but are now often barred from participating in the pro-Israel shows.
The fairs amount to unfair competition because they often receive the backing of the local Jewish establishment. That can mean free advertising, free volunteers and free or reduced cost of securing exhibition space for the Israelis while the Americans pay for rent, staff and advertising.
Unregulated sales prices. In some cases, the Israeli merchants are able to undercut the prices of American merchants because the Israelis are not collecting sales tax, a potentially illegal scenario. Several sources told The Jewish Week that sales tax was not collected at a recent New York show. Conversely, some sources reported that Israeli vendors were charging higher prices, which while not illegal, takes advantage of customers committed to supporting Israeli merchants.

Concerns that the merchandise being sold is not actually made in Israel. Several sources said they personally knew of such cases.

Perhaps the most vexing concern raised by the local merchants: Who is really benefiting from the Israel expos?

The original concept was to help struggling merchants and artists such as those in Jerusalem’s Ben Yehuda Mall who have had few tourist customers for about two years because of the ongoing conflict between Israel and the Palestinians.

And they have helped immeasurably.

"I couldn’t have imagined this in my wildest dreams," Yuval Boteach, owner of Jewels of Jerusalem, said during a recent fair. "For months I have not been able to pay my rent at my store, but from today alone I can pay and survive, thanks to these angels," he said, referring to the fair organizers at Congregation Kehilath Jeshurun in Manhattan.

But American Judaica storeowners and community center sponsors agree there is no system in place to screen the Israeli vendors and determine who is included and who is not, and why.

Some American merchants say it appears there is a small group of Israeli merchants or their representatives being organized to come to the U.S., traveling from fair to fair and doing well, while many other Israeli vendors are being shut out.

"A tightly controlled band of artists is being allowed into a group and that’s it," said Rochelle Stern, a Long Island-based Judaica distributor who contends that some Israelis have suddenly gone into the Judaica business to take advantage of the emotions of Americans wanting to help Israel.

"We call them carpetbaggers," she said.

"The mind-set is that we [American Jews] are giving charity," Stern said. "People won’t spend $500 to go to Israel, so they go and buy a yarmulke or a key chain and say ëI did something.’ "

The explosion of "Buy Israel" expos, or "mitzvah malls" as they are called in Philadelphia, is hurting Stern’s ability to get merchandise and thus her ability to supply her retailers, she contends.

"Those of us in this industry who are retailers and importers for years are being rewarded for our efforts in promoting Israeli products by essentially being excluded from these Israeli fairs," said Michael Freiser, who owns Yussel’s Place in Merrick, L.I.

Freiser and others question why local Jewish nonprofit agencies, such as synagogues and community centers, as well as rabbis from the pulpit, are promoting and aiding for-profit Israeli businesses while hurting his own.

"It’s an unfair situation," he said. "I’m selling much of the same kind of merchandise. This is my livelihood."

American Judaica artists are also crying foul.
"Every American Judaica artist I know is having difficulty in sales," said Brenda Orenstein, a California-based Judaica woodcrafter.

"I have not gotten an order probably since before the summer," laments Irene Helitzer, a Judaica potter based in Sea Cliff, L.I. "Business is really bad, and it’s because of the independent street deals happening in every other synagogue, every other week that is taking so much business."

A review of newspaper ads and community fliers shows there were Israeli expos and fairs every weekend in New York City in October and November.

The sad thing, Helitzer explains, is that the fairs are being sponsored "presumably to help Israelis, but what it’s doing is helping the same handful of people and very severely injuring the small merchants here."

Worse, she says, official Jewish community leaders have been ignoring the problem.

"It’s really hard to complain about this and not sound like a selfish person who really doesn’t care about what’s happening to our poor brothers and sisters in Israel," Helitzer confides. "A quick way to become unpopular is to say the things I’m saying."

"I’ve spoken to some lay leaders in the community and they are oblivious to this," said Freiser.

Lohmiller believes the situation raises Jewish legal issues as well economic concerns. She has asked several rabbis and Jewish organization leaders whether the unfair competition of the Israeli fairs constitutes a violation of the Jewish legal concept barring one from depriving his or her neighbor of making a living. She hasn’t received an answer.

"The lines are being drawn as the parnassah [livelihood] is being taken from many to benefit a few, as the same vendors appear in the shows throughout the country," she said.

Leah Schwartz, who last month coordinated the largest Israeli expo in New York City (held in three locations in Queens) said Lohmiller and others are raising "very legitimate questions" about how the fairs are being organized and operated, and who is really benefiting.

"Our intention was not to hurt the people who have ongoing Judaica stores," she said. "Our desire was to do something for the Israeli merchant."

And she said the expo was a "tremendous success," drawing 4,000 people. "I’ve never enjoyed working on a project as much as working on this," Schwartz said. "It gave me great joy."

But in hindsight, she admits there were some problems, including not checking whether exhibitors were bona fide Israeli merchants and artists. Schwartz, like some other American Jewish sponsors, either had no vetting process or relied on an Israeli middleman to assemble the retailers and artists.

"Anybody who wanted to jump on board, we did not turn away," she said. "Unfortunately it backfired."

Barbara Dreyfus, who co-chaired the recent Ben Yehuda Mall in Greater Phoenix, said the event brought the region’s Jewish community closer.

"There were 10,000 people" at the event and "we took in $154,000," she said proudly. "We mobilized the Jewish Phoenix community as never before. We had 650 happy and enthusiastic and now committed volunteers. We had Christians among those volunteers. We did a fabulous thing for this community and for Israel."

But Dreyfus said if some Israelis have found a niche for themselves and are exploiting the situation, "it doesn’t sound fair."

For example, she asked the Israeli middleman for a list of vendors and an inventory list so she could check up. She never got it.

"This is rife for corruption," Dreyfus said. "When you’re wrapped in compassion, you are naive about a lot of things."

One problem, she said, is that each community effort for Israeli merchants is ad hoc and operating under its own rules, and therefore experiences aren’t being shared.

Rabbi Pesach Lerner, executive vice president of the National Council of Young Israel, agreed that the fairs pose problems for Americans retailers and artists, and that they raise halachic issues.

But he plans to sponsor a 50-day bus tour across America of about 30 Israeli merchants and artists to begin in January.

Rabbi Lerner said rabbis in each community should decide for themselves whether the fair poses a halachic question as to the livelihood of local merchants. One Israeli fair is not going to hurt a local merchant, he said.

Rabbi Lerner said he is relying on a middleman, a Long Island-based tour operator who intends to make a profit, to choose the participants.

Asked if anyone is making sure the merchandise is made in Israel, he said, "I think that’s a good point."

Defending the project, Rabbi Lerner said, "You will have 25 stores and their families making a living for this year when normally they wouldn’t."

Nevertheless, he said the American Judaica merchants and artists have valid points. "Do you cut this [campaign] off completely, or is there a happy medium?" he asked.

Lohmiller and Stern say the answer is to invite the American merchants to participate in the fairs.

"What these fairs should do is introduce Americans to a full range of Israeli products, foods and other goods," said Freiser.

Helitzer said she would be happy to donate a percentage of her sales if it went to people who are on soup lines or to Magen David Adom, the Israeli Red Cross.

Said Lohmiller: "We just want parity."