The Knesset’s Economics Committee, headed by MK Michael Bitton, yesterday approved for second and third reading the proposal to amend the Postal Law. The amendment is mainly intended to implement the recommendations of the Rosen Committee, which recommended, among other things, to open the postal sector to competition, reform the package industry from abroad and expand the supervisory and enforcement powers of the Ministry of Communications and the Minister. Already at the beginning of the discussion, Chairman Bitton announced that he intends to complete the preparation of the proposal for a second and third reading, noting that at the committee’s request additional sections have been added to anchor the concern that action in the distribution centers be fair to all parties.
At the beginning of the discussion where the committee will deal with a section that will allow the post office to give discounts to business customers. Barry Printing CEO Ben Suchman commented that the section would allow the post office to give a different price to business customers in the periphery compared to customers in the center, and the criteria for discounting are amorphous and will not allow the Ministry of Communications to monitor and control the arbitrariness of discounts. The legal advisor of the Israel Postal Company, Adv. Dan Carmeli, said on the other hand that it is inconceivable that the post office would not be able to compete in a business market, whose monopoly is that of Barry Printing and Messer.
Following the concern, which was also raised at previous meetings, and at the request of the committee, the section intended to address this was amended. The director general of the Ministry of Communications, Liran Avishar Ben Horin, commented on the allegations and said that the discount clause was intended to address the fear that the mail would operate in a non-competitive manner. She noted that the Ministry of Communications does not think it is right for the post office to publish a detailed discount table because it will allow players to calculate the price it gives in the tender, but added that it does not object to adding that discounts given in accordance with the criteria will be non-discriminatory.
The chairman of the Israel Postal Company, Mishael Vaknin, asked why private postal companies, such as Messer, would not be required to provide criteria. Contact the competition authority.
In addition, the financial sanctions clauses were approved, which increased the sanctions from NIS 28,680 for serious violations to NIS 400,000, and from NIS 13,570 for the less serious offenses to NIS 200,000. In this context, it was determined, among other things, that giving a discount that does not comply with the criteria will be considered a serious violation and the sanction is expected to be NIS 400,000, while failure to publish the standards or fail to hand them over to the Minister will be considered a lower violation.
In addition, the section was approved which stipulates that if by 31 December 2026 all the conditions for turning the Post Bank Company into a bank are not met, then the amendment seeking to make it an independent bank will be revoked and the existing situation will be maintained. Lavian’s VP explained that in accordance with the requirement of the Supervisor of Banks, in order to obtain a state banking license, he must hold less than 50% of the Post Bank. Therefore, Lavian added, the purpose of the section is to allow anyone who wants to buy the postal company in the privatization process to make the separation, and obtain a bank license, but to limit this in time until the end of 2026.
The committee then discussed a section that the Ministry of Communications wanted to add to a proposal designed to address entry into the distribution centers operated by the postal company. The director general of the Ministry of Communications, Avishar Ben Horin, explained that the distribution centers hold 22-27 percent of the addresses in Israel and constitute about one-eighth of the quantitative mail.
Avishar Ben Horin presented a model that seeks, according to her, to neutralize the competitive advantage of the post office, so that the price of distribution in the centers will be monitored and cost-based. The service standards will also be uniform and if the post office wants to improve the service to its customers, it will have to give the same service to everyone. The CEO also said that if the competitors wanted to provide a better service, they could reach an agreement with the post office on the price, and in case they did not succeed, the minister would set the price. The director general of the Ministry of Communications, Avishar Ben Horin, said that the section was intended to neutralize the competitive advantage of the post office.
Chairman Bitton wanted to make sure that the government would indeed bring solutions, and as a result his proposal was accepted that in a year the ministry will present to the committee the model it seeks to implement. .
At the end of the discussion, CEO Avishar Ben Horin asked to congratulate Chairman Bitton and committee members, saying that another dramatic step had been taken in the revolution in the Israeli postal market, adding: “The reform passed today Enforcement tools on the other hand. The reform of the postal market, along with the post-privatization process of the postal company, will provide a holistic solution to current challenges, and will bring the Israeli consumer excellent and advanced postal services. “