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Moshe Ronen  Letter 03  23-Mar-2000  Is kosher labelling a variant of a pyramid scheme?
"Whereas in the classical case, a pyramid scheme is inexorably pushed toward collapse, in the kosher labelling variation, it may tend toward attaching itself parasitically to the entire economy." Lubomyr Prytulak

March 23, 2000
Moshe Ronen
National President
Canadian Jewish Congress
100 Sparks Street Suite 650
Ottawa, Ontario
K1P 5B7

Telephone: (613) 233-8703
Fax: (613) 233-8748


Moshe Ronen:

Is kosher labelling a variant of a pyramid scheme?

It is my understanding that kosher certification cannot be granted merely upon an inspection of a manufacturer's premises and methods, but requires as well the certification as kosher of all materials that might be used in the manufacturing process, most notably, ingredients.

For example, a baker cannot receive kosher certification unless his supplier of flour receives certification first, and his supplier of salt, and of sugar, and of yeast, and of milk, and of butter, and so on, and so on.  (On top of that, one imagines that materials that are not ingredients and not even edible would first have to be kosher-certified as well, such as the cellophane wrapping for bread, or the dish soap used in the kitchen.)  Thus, in order to receive kosher certification, the baker might find himself pressuring ten or twenty or more suppliers to themselves seek kosher certification.  However, for each such supplier of materials or ingredients to receive certification would require that his suppliers in turn receive certification as well, and so on without end.  Thus, if a single candidate for kosher certification has to pressure 20 suppliers, and each of these 20 has to pressure 20 that supply them, then 400 more are being pressured; and if these 400 have to each pressure 20 of their suppliers, then 8,000 more are being pressured; and so on exponentially all triggered by a single kosher-certification candidacy.

As the supplier of an ingredient may be located at some distance (perhaps even in a different country, or on a different continent) from the manufacturer currently seeking kosher certification, the kosher-certification of ingredients suppliers can require travel by the local rabbinical inspectors, thus driving up costs:

If information regarding the kosher status of an ingredient sourced from a distant location needs verification does the agency have experts in kashruth all over the world who can easily do a plant inspection?  Or do they always seem to demand, at considerable expense and delay in time, to visit the distant manufacturing plant themselves?
Dr. Avrom Pollak, President, STAR-K KOSHER CERTIFICATION, from his address How to Choose a Kosher Certification, available online at http://www.kashrut.com/trade/trade_links/hechsher.

Furthermore, Dr. Avrom Pollak reveals that it may sometimes happen that an ingredient supplier's kosher certification from one agency may not be accepted by another agency, thus requiring duplicate certification and overlapping fees:

One issue which may not be so obvious when first negotiating terms of kosher certification, but can be a very serious concern later on, is your need to know in advance if your raw ingredient suppliers will require kosher certification, and if they do, will their present certification that they may already have, be acceptable.  Although in most instances reputable agencies accept the certifications of other reputable agencies there are a disturbing number of exceptions to this rule and you should be forewarned if one of your suppliers is going to present a problem.
Dr. Avrom Pollak, President, STAR-K KOSHER CERTIFICATION, from his address How to Choose a Kosher Certification, available online at http://www.kashrut.com/trade/trade_links/hechsher.

Your answer here would attempt to dispel the impression that the kosher certification business might be pyramidal in that each candidate finds himself forced to sign up a large number of other candidates.  Whereas in the classical case, a pyramid scheme is inexorably pushed toward collapse, in the kosher labelling variation, it may tend toward attaching itself parasitically to the entire economy.  As suppliers can be international, the entire economy that is vulnerable to parasitization is the entire world economy.



Lubomyr Prytulak


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