Kelsey Media

Passover Price Gouging

50 comments

I told you how my family and I don’t use many processed foods for Passover, thus avoiding many of the ugly price-fixing that goes on during the holiday. But some things, you just can’t buy — unless, of course, you want to squeeze your own olive oil.

These two bottles of grapeseed oil look basically the same, don’t they?

passover oil

There’s just one tiny difference: One bottle, we bought a couple of weeks ago, before the Passover rush (that’s the open one). We ran out last night (during Chol Hamoed) to buy the second. Aside from that, they’re virtually identical. Or are they? Oops — look again.

passover oil $8.99

That’s the bottle of oil we bought way before Passover — before the supermarkets started isolating their Passover products to a specially-tagged PASSOVER SALE NOW! section. And what about the bottle on the right? You’ll notice it doesn’t have a price tag.

Fortunately, we managed to save the receipt.

Now, $8.99 versus $12.49 isn’t a huge difference, 29% of the total cost — unless you think of it on a macro scale. Imagine being charged 1/3 more for everything you bought in a week. (In our part of Brooklyn, with an average family size of 10, chances are almost everyone is affected more than we are.) Despite the successful lawsuits against Manischewitz and other matzah companies for price-fixing, there are huge problems that need fixing. Even after all that Pesach cleaning, it’s still a dirty business.

Crossposted from MyJewishLearning

  • Conservative apikoris

    Maybe you need to avoid the “heimish” brands and shop at stores that don’t cater exclusively to Jewish customers.

    In the case of olive oil, I was told by an Orthodox rabbi that it doesn’t need a special pesach hechsher, so you could just go to the non-Pesach section and get a bottle of regular oil. For grape seed oil, I don’t know if there are special kashrut requirements because of the grapes, but I would suspect that if it has a regular hechsher, it”s kosher for Passover, too.

    • MV

      Frum people think they can charge higher prices when selling to other frum people, because of supporting your own people/ignorant of anything else ideas. I brought my dress to a Jewish cleaners and they wanted to charge me $25 for it. I took it to the Chinese place down the street – $8! I am all for supporting my brethren, but not when they take such advantage, that isn’t brotherly in itself. (afterwords I went to a few other Jewish places, and a few other non-Jewish places, and all the Jewish places were way more expensive)

      • MV

        btw, if anyone knows of a Jewish cleaners (in Brooklyn) with normal goyish prices, please let me know, and I will definitely go there.

  • http://conservadoxandsingle.blogspot.com Katrina

    The OU website’s 2010 Passover Guide says that extra virgin olive oil does NOT need a special Pesach hekhsher.

  • Dan the man

    Its sad that people take such advantage of others. I wonder? What if your Esrog tip broke in the middle of Succous? How much does it cost for a new one mid yom tov?

    • MV

      I assume its very cheep. I know this guy, he always waits till right before Yom Tov to get his Esrog, gets it for nothing.

    • Bubba Metzia

      Buy a Yemenite Etrog. They don’t have a pitom so you don’t have to worry about it breaking off.

  • A. Nuran

    If it’s gone on this long it’s a minhag, and we can’t change it. Price gouging other Jews is Torah you ignorant aporikosim!

    • http://righteousrasha.blogspot.com Tova

      Ahahaha…in reality, though, prices are as high as they are because people are willing to pay them.

      • A. Nuran

        In reality you’re making the typical conservative’s mistake of assuming perfect markets. What you have here is extremely limited substitutability of goods, sky-high barriers to entry and an effective oligopoly. That inevitably means very high prices.

        • A. Nuran

          Oh yes, and we’re talking about essential goods here, not luxury.

          • Phil

            Once upon a time, Beis din had the right to spot check merchants and beat price gougers with a stick.

            In general, when anyone was gouging over one sixth of market value, you had the right to claim a refund.

            It is sad that the hechsher people don’t address this issue at all, sky high prices discourage non or partially religious many people from buying kosher / passover items.

            • A. Nuran

              There’s a lot of wisdom in that custom. Unfortunately, the people giving the heshers now have a profitable economic relationship with the producers doing the gouging.

        • RK

          No, this is confused. Tova is proposing that the market here isn’t efficient. In an efficient market, price is determined by marginal cost.

          It’s only when the suppliers have market power that they can price in the elastic portion of the demand curve, and prices are a function of how much people are willing to pay.

          • http://righteousrasha.blogspot.com Tova

            Thanks, RK. I have enjoyed this discussion, save for the bits where others accuse me of belonging to political ideologies that I don’t subscribe to.

          • A. Nuran

            The point is that they DO have market power. There is a limited number of suppliers, effectively a cartel. There are high barriers to entry which by definition works against market efficiency. And substitutability is approximately zero.

            The Observant are forced to buy from the cartel and are price-takers.

            And Tova, you have pretty consistently taken a doctrinaire neo-liberal “efficient markets”, “no market failures”, “rational expectations” sort of undergrad approach to economics complete with the catch-phrase “Economics is the study of personal choices”. You may not think you subscribe to the conservative ideology, but you follow the Party Line with no exceptions to date.

            • http://righteousrasha.blogspot.com Tova

              Fascinating that this is what you think I believe. Since you’ve demonstrated that you don’t know my views very well at all, though, I’ll do my best to avoid any further discussion with you.

            • RK

              Yes, that’s what Tova was saying! She said that prices are high because that’s what people are willing to pay. This can only be the case if the suppliers have market power. Contrary to your accusation, she’s not assuming perfect markets at all.

              It’s true that there’s a lot more to economics than Econ 101. But first you have to actually understand Econ 101.

              • http://righteousrasha.blogspot.com Tova

                RK, you’re very smart. Have you taken any econ courses?

                • RK

                  It’s nice of you to say that. I’m a graduate student and I teach econometrics.

        • http://righteousrasha.blogspot.com Tova

          I wish you would stop calling me something I’m not.

  • Make it LOVE

    LOVE LOVE LOVE … YA IT MAKES ME SICK AS WELL BUT all this negative ENERGY SPINNG INTO MORE SPIRALING NEGATIVE ENERGY…THATS MUCH WORSE…..BUT STUFF ON SALE AND SHUT UP ;)

  • http://orthodoxjewishnurses.googlepages.com/ Rivka

    actually, I found that food that I bought mid yontif was marked down, because the stores know that no one will want it after pesach. I got a box of handmade shmura matza for 9.99 and the register said I saved $8.

    • http://www.frumsatire.net Heshy Fried

      Yeh that’s like scalping tickets at a concert that’s already half over with

  • emily

    it’s very frustrating. i don’t understand why we don’t organize before pesach (since by now we know what to expect) and boycott and demand lower prices. get the press involved. if this was happening in non-jewish stores, people would go berserk. why do we sit around and allow our own people to cheat us?

    rivka: too bad that shmura matzah wasn’t cheaper before the seders!!

    • tesyaa

      Repeat after me: MACHINE SHMURA MATZA MACHINE SHMURA MATZA MACHINE SHMURA MATZA

  • http://righteousrasha.blogspot.com Tova

    “why do we sit around and allow our own people to cheat us? ”

    Read my earlier comment.

    • emily

      totally why the communities all need to organize in advance of the holiday. if a steady stream of letters started pouring in and if we started boycotting these brands during the year with the message that we no longer will purchase (for example) products from lieber’s during the year because we’ve given them enough money on pesach, they have to listen bc they would lose money otherwise. the biggest problem is probably that the communities that would willingly boycott are the communities who have no problem purchasing national brands during the year, and the communities who usually purchase strictly jewish brands will probably not want to get involved.

      • http://righteousrasha.blogspot.com Tova

        The basic thing to remember here is demand elasticity with relation to price.

        Demand for Pesach groceries is largely inelastic relative to price; unless people make a concerted effort not to buy expensive Pesach groceries, there will be no reason for the prices of said items to be lowered.

        As an economics major and someone who works in a supermarket, I can say that much of the high prices for Pesach have to do with the prices created by the distributors themselves. The distributors are either not “price-takers” ; they are, instead, price-makers. And so, if they charge a certain price to retailers, said retailers need to comply in order to stock their shelves.

        • http://righteousrasha.blogspot.com Tova

          *not “price-takers”

        • A. Nuran

          You’ve just contradicted what you said in reply to my earlier comment. The price isn’t high because people are willing to pay that much. It’s high because there are limited alternatives and limited suppliers for a necessity. This isn’t diamonds vs. water. It’s hydraulic despotism.

        • emily

          as an aside, i always think it’s funny when people have to qualify their positions in terms of education. i was not an ec major although i did take economics. (i’m just a lowly scalliwag with an MA in english, lol.)
          i completely understand the principles involved in formulating prices, however, 1. price ceilings need to be in place; and 2. stores understand that if customers stop purchasing products, they will not be restocking as often. if they don’t restock as often, it hits the distributors, who then need less of the product. that, in turn, hits the manufacturing company, who now ends up with more supply (because they are most likely making a certain amount of these products at this point, since they know the market) and suddenly, there’s less demand and they start to lose money. it’s not an overnight solution to boycott, but it would have long term effects. depending on how often kosher supermarkets (bc most of these consumers are purchasing these products at kosher supermarkets) restock their shelves.
          btw, i also used to work in a supermarket when i was in college. but that was before they had scanners, lol.
          : )

          • emily

            (sorry, there shouldn’t be a period after long term effects.)

          • http://righteousrasha.blogspot.com Tova

            1. How have I contradicted myself?

            2. I didn’t mention my employment and major as a way to come off as a snob; I apologize if this was the implication. I’m only saying that the things I’ve studied – and seen with my own eyes at work – have contributed to my viewpoint of such topics as Pesach price gouging. Would you agree?

            • A. Nuran

              How have you contradicted yourself?

              On one hand you say that the prices are at a level far above cost because people are willing to pay them.

              Then you say they are high because of price elasticity of demand, a situation which clasically obtains when there are no alternatives and consumers must act as price-takers for necessity goods.

              • http://righteousrasha.blogspot.com Tova

                Um…That isn’t what price elasticity of demand means. Fail. Additionally, even using your ‘definition’ of PED there would be no contradiction.

  • Ra’ananInAlbany

    You’d be surprised how many items do not need special hashgacha for Pesach. The OU, CRC, and the Albant VHCD put out guides with what does and does not need hashgacha for Pesach. Also, people need to learn to shop smarter. While i didn’t have to buy everything new this year(i save stuff from year to year), many things tide over well in proper storage for a year(come one, let’s not fool anyone, Passover food has a half-life, not a shelf-life), and don’t need to be eaten after Pesach is over. Keep a list, and a sturdy plastic bin, and you’re golden. Maybe you shouldn’t save your matza(you can, though), but your spices, bottles of oil, pan spray, plastic wrap/foil, soup mixes, the works, can all be save d for next year, eliminating a small amount of money wasted on overpriced food.

    • Ra’ananInAlbany

      Also, plan ahead. Make menus, and be realistic. You don’t need 4 bags of lollipops, instead, vary your junk-food purchases.

    • AMR

      Ra’anan
      It is true that there are things that can be saved year to year, spices is not one of those. Even non Jews but the Kashlap spices during this season because they know there is no filler in the spice, it is mostly if not 100% pure. I buy my spices now for the entire year for this reason.

      • sarah

        um, regular spices are not adulterated. Pesach spices are not “more pure”. Ingredient lists are not allowed to be falsified. Though one should replace spices every 6 months to a year anyhow.

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  • Moshe

    As someone who manages a Kosher store that does raise it’s prices for passover goods, I can tell you its not the small stores that cause the price increases. Every Item that it purchased off the “Kosher for Passover order list” has been riased by the manufacturers (Kedem, Liebers, Empire…). ANY sulotion to have cheaper prices must begin with lower prices at the source, which is the manufactures.
    Aditionally, by shopping at the big stores such as costco only hurts the smaller jewish buisness’ which are caught in the middle of the price gouging. The manufacturers are still selling to costco and will continue to make a profit no matter.
    lastly, just to fill everyone in, the manufacturers such as kedem (and all the others) sell most of thier items to costco at prices so cheap that costco can afford to sell to it’s customers at prices cheaper than other jewish stores can purchase them from the manufaturers. ultimatley this will lead to the closing of many jewish owned business’ as i know of about sex stores in my area that are on the verge of closing within a year as a DIRECT result of costco getting to opportunity to purchase items so much cheaper then it’s jewish counterparts.

    • http://www.frumsatire.net Heshy Fried

      Kind of like Wal Mart – except for some reason Costco doesn’t have as bad press.

      • http://hatthief.blogspot.com Meir

        Costco, Walmart and all big-box stores are all terrible on the community-killing scale, both as symptoms/byproducts of the trend over the last 60 years to do the whole subdivision/anti-community/sprawl form of development [which is also terrible for other reasons that I won’t get into] which was preceded by the strip mall/shopping mall, and in terms of driving small/family businesses with stakes in the community into the ground.

        However, leaving this admittedly quite nasty aspect aside, the reason Walmart legitimately gets much more flak than Costco is its labor practices.

        These include everything from locking employees in at night to foisting the healthcare costs of its employees off on the state/federal government.

        Walmart’s 100% shut-out of labor unions (in this country; in China the Communist Party is allowed to have the party unions in Wal-Mart-brand goods factories) is also a big reason for more flak, though of course this is from a self-interest angle rather than public good.

    • http://hatthief.blogspot.com Meir

      There are legitimate reasons for Passover prices to be so much higher that have nothing to do with any potential price-gouging by retailers.

      There are

      A) [the biggest part, I would guess] all the special cleaning that needs to be done to equipment in order to make it Pesachdik; the equipment cannot be used during the cleaning period, of course, so there’s another loss there in addition to the cleaning costs

      B) Economies of scale; for most pareve products, the price of manufacturing the product to be kosher versus non-kosher is not so significant; ingredients are not an issue. So it makes sense for them to just make all of their product line to kosher standards. I would guess hashgacha fees are probably the biggest part of the increase in cost there.

      For Pesach, though, they can’t do that, because almost nobody not required to by religion will eat most Pesach products. So they lose the economy of scale

    • http://twitter.com/MarkSoFla Mark

      Moshe – i know of about sex stores in my area that are on the verge of closing within a year as a DIRECT result of costco getting to opportunity to purchase items so much cheaper

      Costco is selling *that* too now???? :-)

  • Zvi Lampert

    I absolutely agree with your post, Heshy. More people everywhere need to speak up about this.
    Frum people have enough of a finacial burden around the holidays without being ripped off by our greedy ‘brothers’ in the kosher supermarket business. I’ve been critical of this phenomenon for years (it goes on around every holiday but not to the extent of Pesach).
    I try to educate myself about which products can be purchased elsewhere (Costco for example) and try avoid shopping at Jewish stores as much as possible. I urge you all to do the same.

    • http://www.frumsatire.net Heshy Fried

      For the record I didn’t write this post – it says who the author is at the top.

      As with regards to pesach pricing, it’s all about market value, if people are willing to pay, they can do it. I myself wouldn’t play their games, I merely restrict myself to overpriced chocolate bars, raw nuts and fruits. As a smart shopper, I would never wait until last minute when it comes to shopping at Jewish stores anyway, in my mind gouging is just another form of Capitalism screwing the little guy and I think it’s perfectly fine.

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  • Dunno

    I thought meat by me was less expensive than during the year, as well as may other things being similar in price.

    Competition (with non-jewish stores, such as Costco) is good.

  • tesyaa

    Maybe Costco negotiates a better price on grape juice because of volume. I don’t see how Costco can put frum stores out of business: they don’t carry most items frum Jews need for weekly needs, much less Pesach.

    Although, I have noticed for over a decade that ShopRite also sells kosher grape juice very inexpensively at Pesach and Rosh Hashana time. It might make the most sense for frum stores to buy from Costco & ShopRite & resell cheaper than they can sell the way things are now.

  • rooster

    You guys should see people taking the same product that is kosher for Passover ALL year round and see the manafacturers or distributers slapping on a a “kosher for Pesach” sticker and raising the price. It is so damn funny!!!

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