Why kosher-for-Passover foods cost so much.

What to eat. What not to eat.
March 28 2010 6:26 AM

Passover Profiteering

I'm sick and tired of paying $24 for matzo.

See a Magnum Photos gallery on Passover.

Matzo.
Matzo

Last week I saw a can of tuna for $16.99, a $5 jar of jelly, and a $6 box of cereal. I felt like I was in a foreign country with rampant hyperinflation. Is this really in dollars? Maybe I'm supposed to convert the currency.

Alas, I wasn't abroad. I was in the kosher-for-Passover section of an Atlanta grocery store. As observant Jews the world over can tell you, it's expensive to be one of us. From synagogue dues, to JCC memberships, to Jewish private school tuition, it all starts to add up rather quickly. Kosher meat, for example, costs approximately 20 percent more than nonkosher meat. But Passover takes the cake. (Metaphorically of course—most cake is forbidden on this leaven-free holiday.) In general, Passover food is marked up an additional 20 percent over regular kosher prices, hence the $24 box of matzo I saw at that same grocery. It seems we should add another question to the traditional four associated with Passover: Why is this food so darn expensive?

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Many blame exorbitant costs on a complex price-fixing scheme among the three major Passover food manufacturers—Manischewitz, Streit's, and Horowitz—which came to light in the early 1990s. Nobody served jail time, but Manischewitz pleaded no contest and was forced to pay a $1 million fine in addition to donating another $2 million in kosher food to charity. It was a PR nightmare, which drew national attention to the problem (at least briefly). But it didn't affect business practices that much in the long run. After Manischewitz repented, they hired an executive from RJR Nabisco to run the company and eventually bought out Horowitz, all while continuing to keep prices high. (Its remaining competitor, Streit's, has figured out another—more inventive—way to keep profits high. They now market their matzo to churches and are one of the major producers of Communion wafers in America.)

It's tempting to accuse Manischewitz of price-gouging—but that's hard to define and even harder to enforce. "A business can charge whatever price it wants for a product," a spokesperson for New York City's Department of Consumer Affairs told me by phone. The DCA used to send out annual press releases reminding consumers to be extra careful with their Passover shopping and even had a hot line to report problems. But, after not receiving many calls, the DCA stopped this practice a few years ago. More recently, some state attorneys general have filed complaints to little or no avail.

The kosher-for-Passover market would seem like a prime business opportunity for someone to come in and completely undersell everyone else. To some extent, that has happened with co-ops cropping up across the nation that offer significant discounts on food ordered in bulk. Furthermore, a number of Israeli-based companies have started producing less expensive products, now available for purchase on many online sites. But those prices are still relatively high. After all, even they know the basic truth of their business: Observant Jews, who are so strict during the eight days of Passover they won't eat anything else, don't really have a choice but to buy these products.

To many, standing up for the Passover manufacturers is like defending Wall Street bankers. There are, however, a couple of valid reasons for the seasonal markup.

First, most reliable kosher agencies require full-time supervision for Passover production (as opposed to occasional pop-ins by rabbis for year-round kosher items). And it's not just for the finished product, but for each of its ingredients. Take, for example, that expensive bottle of ketchup. It's comprised of multiple ingredients sourced from other manufacturers. Not only does the ketchup have to be made under full-time supervision for Passover, but so do the spices, vinegar, and oils that flavor it. And someone's got to pay for the rabbi's time. Second, in just about all the cases, companies must clean production equipment thoroughly to get rid of any non-kosher-for-Passover ingredients. This process often requires a costly 24-hour downtime for the production plant.

Since prices are likely to remain high, consumers are taking matters into their own hands. Jewish community groups, a valuable purchasing bloc for local grocers, have pressured supermarkets to at least keep prices steady from last year, urging them to consider the dismal economic climate. And, by many accounts, they've met with some success. In fact, certain prices have even gone down. This year's $5 jar of jelly sold for $7 last year. Praise the lord. Passover is a holiday about redemption and about hoping for a better future. Next year in Jerusalem; next year, let's bring that jelly down to $4.

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