Does Israel Need a Hilmer Report?
An Israeli family of four now needs NIS 14,139 a month — roughly $4,480 — just to meet bare minimum needs, with NIS 3,797 going to food alone. Food prices in Israel are 51 percent higher than in EU countries and 37% than the OECD average, according to the State Comptroller. Israel ranks fourth in the OECD for cost of living. Nearly 27% of Israeli families faced food insecurity in 2025, up from 21 per cent the year before. And when the State Comptroller’s office examined 38 food categories — from bread and milk to coffee and frozen chicken — it found that in 20 of them, just three corporations control more than 85 per cent of the market.
This is not what a competitive economy looks like. It is what you get when market concentration is treated as a structural feature rather than a structural failing.
The Australian Precedent
In 1993, Australia faced its own version of this problem. State-owned monopolies dominated utilities. Professions were ringfenced from competition. Prices were high and productivity was stalling. The government commissioned Fred Hilmer — a McKinsey director turned business school dean turned corporate CEO — to review the entire competition framework from the ground up.
I knew Fred Hilmer. He was my Vice-Chancellor at the University of New South Wales, and I found tracing his career path — from chairing that 1993 competition review to running one of Australia’s largest media companies and then leading a great research university — genuinely inspirational. What struck me was that Hilmer never treated competition policy as an abstraction. He understood it as a practitioner who had operated on both sides of the markets he sought to open up.
The Hilmer Report did not tinker. It created new institutions — the Australian Competition and Consumer Commission and the National Competition Council. It established competition principles that bound all levels of government. It introduced fiscal incentives: states that reformed were paid to do so, and an independent body could withhold payments from those that did not. The Productivity Commission later concluded that these reforms underpinned a generation of sustained productivity growth.
Australia’s current government now estimates that revitalising that competition framework could boost GDP by up to $45 billion annually and reduce prices by up to 1.5 percentage points. The lesson is clear: comprehensive, institutionally anchored competition reform delivers results at scale.
Israel’s Competition Deficit
Israel has had its moments of reform ambition. The 2011 social justice protests — which brought nearly 500,000 Israelis onto the streets — forced the issue of market concentration into the national conversation. The Trajtenberg Committee was established and recommended reforms in taxation, housing, social services, and competition. The 2013 Anti-Concentration Law, passed unanimously by the Knesset, was arguably the most significant structural economic reform since the 1985 Stabilisation Plan. It targeted pyramidal holding structures, separated financial from non-financial holdings, and sought to dismantle the conglomerate architecture through which a handful of families had controlled vast swathes of the economy.
These were real reforms. The pyramid structures were largely dismantled by the 2019 deadline. The market capitalisation of the holding sector fell by 42 per cent. But the deeper problem — the concentration that consumers actually experience at the supermarket checkout, the petrol station, and the bank counter — has proved far more stubborn.
The Israeli market remains dominated by industrial monopolies: Tnuva, Osem-Nestlé, and Strauss-Elite across food manufacturing; Diplomat and Schestowitz holding exclusive import rights to dozens of major international brands; Shufersal commanding over 30 per cent of national supermarket market share with gross margins that have risen from 23 to nearly 30 per cent over the past decade. The Israel Competition Authority has stepped up enforcement — actual prison sentences for cartel offences, an ILS 80 million settlement with Bank Hapoalim and Israel Discount Bank for unpermitted acquisitions, and a landmark Supreme Court ruling allowing indirect victims to sue cartels. But enforcement, however vigorous, cannot substitute for structural reform of the kind that changes the competitive architecture of the economy.
What a Hilmer-Style Framework Would Look Like
Israel does not need to copy Australia’s 1993 blueprint. But it could learn from its logic. What made Hilmer transformative was not any single recommendation but the system: binding competition principles across all levels of government, independent institutions with real enforcement power, fiscal incentives that aligned political interests with reform outcomes, and a shared intellectual framework that treated competition as the engine of consumer welfare.
Consider what this would mean in the Israeli context.
First, import barriers. The “What’s Good for Europe is Good for Israel” standards reform — expanded in March 2025 to include US-certified products — is a step in the right direction. But the State Comptroller has found that adoption among importers remains low. A Hilmer-style framework would not rely on voluntary adoption. It would systematically dismantle the exclusive import arrangements that allow two distributors to function as gatekeepers for consumer goods, and it would impose a public interest test on any regulatory barrier to import competition.
Second, food and consumer goods. The finding that three companies dominate 85 per cent of 20 out of 38 food categories is not a market functioning normally. It is a market structured to resist competition. A standing competition body with the power to conduct market studies, recommend structural remedies, and publicly report on government compliance — as Australia’s National Competition Council does — would create sustained pressure for reform that outlasts any single government.
Third, banking and financial services. The Bank of Israel’s graduated licensing framework and the proposed securities fee reform are welcome. But the ICA’s pending designation of the five largest banks as a “concentration group” in retail services, and the proceeding to remove bank control of MASAV (the clearing centre), suggest that the structural separation Australia achieved through its competition framework has barely begun in Israel’s financial sector.
Fourth, wartime exploitation. The evidence that food manufacturers and retailers used the period since October 2023 to raise prices while public attention was diverted to security is damning. A basic grocery basket has risen by 20 per cent — roughly NIS 250 per month for a family with two children — over three years. Dror Strum, the former Commissioner of the Israel Antitrust Authority, has put it bluntly: the cost of living in Israel is the result of a government that allows food companies to become monopolies. A Hilmer framework would have provided the institutional architecture to respond in real time — market studies, emergency pricing reviews, and the credible threat of structural remedies — rather than relying on consumer protection authorities that, as the Ministry of Economy itself acknowledged, lacked the legislative tools to act.
The Option Israel Is Not Exercising
In the language of finance, Israel is sitting on an enormous out-of-the-money call option on its own productivity and consumer welfare. The premium has been paid through decades of foregone reform, through the social cost borne by the 27 per cent of families living with food insecurity, through the more than one in four Israelis now considering emigration because of the cost of living and “the lack of a good future for my children.”
The 2013 Anti-Concentration Law showed that Israel can legislate transformative reform when the political will exists. The Israel Competition Authority’s intensified enforcement in 2025 — prison sentences for cartel offences, expanded civil liability, transparency in merger review — shows that the institutional capacity exists. What is missing is the comprehensive, systemic architecture that connects these individual interventions into a self-sustaining reform dynamic.
Australia’s Hilmer reforms succeeded not because they were popular — they were not — but because they were comprehensive, institutionally anchored, and backed by incentives that aligned political interests with economic outcomes. Israel has the intellectual capital, the institutional foundations, and — most pressingly — the consumer crisis to justify a Hilmer-scale rethink of its competition framework.
The question is not whether Israel can afford such a reform. It is whether Israel can afford not to undertake one.