Knesset advances bill to repeal kashrut reform, potentially raising food prices

Israel's Knesset has taken a step toward repealing a 2021 reform designed to liberalize the country's kashrut certification system. The bill, passed in its first reading, aims to prevent the official kashrut market from opening to broader competition, potentially maintaining the status quo controlled by the Chief Rabbinate and local rabbinates.

The 2021 reform, championed by then-religious services minister Matan Kahana, intended to shift the system from a near-monopoly by the Chief Rabbinate to a regulated market where private kashrut bodies could also issue official certifications. This move was meant to foster competition, increase efficiency, and address conflicts of interest, such as supervisors being paid directly by the businesses they certify.

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Because the reform has not been fully implemented, official kashrut certification for food businesses remains controlled by local rabbinates.

However, the reform has largely remained unimplemented. According to the Competition Authority, the current structure grants each local rabbinate a geographic monopoly over basic kashrut certification. This prevents competition, creates inefficiencies, and burdens businesses, especially national chains that must navigate varying local standards.

The Competition Authority warned in an opinion ahead of the vote that maintaining this system could prevent competition and burden businesses. The proposed repeal raises concerns that the market will not open to private competition, potentially leading to higher food prices as the current system's inefficiencies persist.

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This structure turns each local rabbinate into a complete geographic monopoly over basic kashrut certification in its area. It said the structure prevents competition, creates inefficiency, and burdens businesses, particularly national chains that must deal separately with different local rabbinates and standards.