Monopoly and Kashrut
It is my second day here at IRAC, and it’s going well so far. On Sunday, I had the opportunity to help Aliza, IRAC’s Development Associate, write this week’s edition of the Pluralist on the topic of Kashrut certification. The main focus of the newsletter was monopoly. To me, a monopoly is when one company has all of the market share for an industry--there is no competition at all, and barriers to entry are extremely high. Monopolies are illegal in the US and most capitalist countries, however, natural monopolies exist in many places. Internet providers are a good example of a natural monopoly. Companies such as Comcast-Xfinity and Time Warner each have areas where they are the only internet provider available. Here in Israel, however, there is one monopoly which is supported by the state to run all religious functions. That is the monopoly of the Chief Rabbinate.
Israel’s ultra-Orthodox Chief Rabbinate currently controls all aspects of Jewish life in Israel, including conversion, marriage, divorce, and kashrut certification. There are multiple rabbinic authorities in Israel, but no others have any power at a national level. This full control equates to a monopoly, especially over kashrut certification. There are high levels of corruption within the Chief Rabbinate, as former Chief Rabbi Yona Metzger is currently serving a 4.5 year prison sentence after pleading guilty to fraud, breach of trust, and tax offenses. The story that the Pluralist explored this week was about a Jerusalem caterer who provides chopped liver for B’nai Mitzvahs in the shape of pink hearts. To pass kashrut inspection, this caterer bribes the kashrut inspector $250 for each pink heart, using money he collects from customers. This is a product of the Chief Rabbinate’s monopoly over Kashrut certification, as monopolies like these allow corruption to run amok. This is bad for the people, and for businesses, as they are tempted to pay these illegal bribes to the Chief Rabbinate in order to botch a certification.
While writing the newsletter with Aliza, she told me that Tzohar, a different rabbinical organization, had begun their own, alternate kashrut certification. I was very interested in hearing that there was an organization prepared to challenge the monopoly that the Chief Rabbinate has over Jewish life in Israel. This is a major change, as it allows for competition in the market for kashrut certification, as grocery stores, restaurants, and other businesses now have an alternative to the Chief Rabbinate. Now that one organization has attempted to scale the barriers to enter this market, other organizations will have an easier time. Not only will this alternative certification allow for competition in the kashrut certification market, it will also allow other organizations to challenge the Rabbinate on other issues as well. If Tzohar can challenge the authority of the Chief Rabbinate, will other Jewish organizations be able to enter the market as well? I look forward to hearing how this story ends up panning out, and if other competitors enter the market.
Until Next Time,