Kosher Competition

Can a community ever have too many Kosher restaurants?  Is there a point in which the market is saturated and the addition of another establishment will hurt the viability of the existing ones?  Should the local Kosher supervising agency legislate issues of competition, or should they allow a free market in which the consumer determines which establishments survive?

These are some of the most difficult questions that often confront any Va’ad Ha’Kashrus (Kosher Supervising Agency).  Among my many responsibilities, I have the privilege of serving as co-chair of the ORB Kashrus, the Orthodox Rabbinical Board of Broward and Palm Beach Counties, one of the largest community-based, non-profit kosher va’ads in the country, providing supervision to over 100 restaurants and caterers.

On the one hand, we feel a tremendous loyalty and responsibility to the owners and proprietors of the establishments we supervise. As a non-profit enterprise, we seek to minimize the expense of keeping Kosher by providing Mashgichim in the most affordable and efficient way we can.  Our goal is to support our establishments in any way possible, including providing useful feedback and helping promote them.  The restaurant and catering businesses are among the hardest and most demanding in general, but being Kosher adds an additional degree of difficulty and overhead.   We should all express our gratitude and appreciation to them for their risk and hard work in providing us wonderful Kosher options in our community.

However, on the other hand, we feel a tremendous loyalty and responsibility to the Kosher consumers, for ultimately we represent them and serve their interests.  Most of the time, the interests of the owners and consumers are aligned, but there are times in which they come in conflict.  Owners want the fewest competitors while consumers value having many options and choices.

South Florida has seen an incredible amount of turnover in Kosher establishments.  Every few months we hear of new places opening and existing places that are closing their doors.  Proprietors argue that there are simply too many options and the market is so diluted that nobody can do well.  Many forget that when they opened for business, there was an existing establishment advancing the exact same argument against our allowing them to open.  We are regularly encouraged to call a moratorium and not provide supervision to any new restaurants.  What should we do?  Is there merit to their argument?

Jewish law recognizes hasagas gvul, literally, infringement of boundary, as an unethical, predatory business practice that is forbidden.  The Talmud (Bava Basra 21b) cites the example of a person who sets up his fishing net adjacent to someone else’s net such that he catches all the fish that were headed to the first person’s net.  While it is considered halachikly wrong and actionable to directly “steal” income, the Talmud and later authorities are less clear if a person introduces competition to the marketplace that doesn’t directly take or appropriate costumers, but simply provides the consumer with an alternative.

The application of the laws of hasagas gvul are very complicated and complex.  Rav Moshe Feinstein (Igros Moshe, Choshen Mishpat 1:38) quotes the Chassam Sofer and agrees that one may not open a business if it will destroy someone else's livelihood, defined as removing his ability to put food on his table.  This ruling is not limited to kosher restaurants, but is directed at all businesses, thereby restricting someone from opening a car leasing business, graphic design, a legal practice, or a cell phone accessory store if it will destroy the parnasah of a fellow Jew in the same neighborhood.  Rabbi Soloveitchik had a much more liberal view of hasagas gvul and, for reasons that are not entirely clear, ruled that in America there are no restrictions on competition and no application of the laws of hasagas gvul, in kashrus or any other business.

Even if one adopts the position that hasagas gvul applies in contemporary circumstances, there are a few cases in which all authorities agree it is not judicable.  For example, the Rama, Rav Moshe Isserles, the authority for Ashkenazim rules (Chosen Mishpat 156:7) that if the new competitor will provide the consumer with a better price or better quality product, there are no restrictions to his opening.

I am very sympathetic to the owners’ position and am committed to do whatever I can to help them.  That said, however, my personal view is that the ORB should not legislate competition.  Our mandate is limited primarily to supervising the kashrus integrity of the food.  Of course we are involved in the appropriateness of the environment (For example, we wouldn’t supervise a night club even if all food was technically kosher) as well as the proper treatment of all staff, health guidelines, etc.

I believe we should leave the question of hasagas gvul to the jurisdiction of Beis Din, the Rabbinical court.  If a particular owner feels that a new competitor is “stealing” his livelihood, I would encourage him to take the competitor to a din Torah, just like I would encourage a person in any other business that feels threatened by the unethical business practice of a competitor.

Just because we happen to supervise the kashrus, why should the Kosher business be more protected or guarded from competition than any other.  Just as other businesses operate in a free-market environment forcing them to provide the best service and the best product at the best price, so too the Kashrus industry is best served with a healthy portion of competition.  If the competition grows unfair or unjust, in my opinion the address to protest is Beis Din, not the ORB.

As I said earlier, the ORB is a non-profit organization and my co-chair Rabbi Davis and I do not receive one penny for the time, energy, and aggravation we expend on its behalf.   One of the benefits of being non-profit and community-based is that we don’t personally stand to gain whatsoever by having more supervisions and we don’t forfeit any money by losing an establishment.  All of our decisions are guided by the consideration of what is best for the consumers and communities whom we represent while at the same time seeking to support the wonderful owners who tirelessly work to provide kosher establishments for all of us.  I pray that our decisions and policies are appropriate and correct.