Industry, Trade and Labor Minister Eli Yishai is planning to meet with owners of the three largest bakeries in Israel Monday in an effort to resolve a strike that has left grocery shelves bereft of government-subsidized "standard" bread, the staple upon which most low-income families base their diets.
The bakeries are refusing to continue producing the bread unless the government allows an immediate price hike of at least 8 percent. Minister Yishai has said that he will not permit a price increase until a solution is found for families who cannot afford more expensive bread. According to recent reports, Yishai plans to work with the Finance Ministry and the Prime Minister’s Office to arrange compensation for low-income families in order to offset the expected price increase.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
A NIS 8 million class action suit was filed Sunday against the owners of the bread bakeries as the latest salvo in the war between the government and the bakeries. The lawsuit was filed in court by attorney Yochi Geva on behalf of Henri Alush, a father of three who regularly buys the subsidized “standard bread” for his family.
The petitioner demands that the bakeries compensate "every citizen whose ability to purchase standard bread or standard challah (special loaves baked for the Sabbath) was denied on July 5th – 8th, and had to buy more expensive bread products."
The suit alleges that Alush wanted to buy standard unsliced bread for NIS 3.65 on Thursday, as he usually does. He was told that the bread was unavailable and that he could only buy more expensive types and therefore was forced to purchase sliced white bread for NIS 5.60.
Grocery shelves are still missing the low-cost bread used by most low-income families, with bakeries refusing to produce the government-subsidized staple without raising prices by at least 8 percent.
Prime Minister Ehud Olmert signed an agreement last week with Minister Yishai (Shas) to freeze the price hike until September. The bakeries balked at the agreement and shut down their production of “standard bread” – the simplest, least expensive “dark” and white bread, which are subsidized by the government.
Monday's meeting between the Angel, Berman and Vadash bakeries and Minister Yishai will be the first move toward a discussion of the bakeries’ claims they must raise prices to reflect the major increase in the cost of flour worldwide.
Some speculate that the companies may be using the price issue as an excuse to discontinue the lower profit standard bread altogether, a bit of information conveyed to Ynet by sources in the food industry.
Yaron Angel, the CEO of the longtime family-owned Angel Bakery, was blunt about his company’s intentions to keep the focus on the financial issues:
“We do what is right for us business-wise and sell the customers bread they like eating and are willing to pay for,” he said. “If we are allowed to sell standard bread at realistic market prices, we will go back to selling it – but the current situation is fine with us.”
Some consumers are planning to deal with the situation by going back to basics. “Home-made bread tastes better anyway,” said one woman who asked not to be identified. “Yes, it will be a pain to take the time out to start baking bread again, but the truth is my kids like it better,” she said.
Others said they will avoid the larger companies’ products altogether in response to the strike and patronize the smaller bakeries who make their own bread and other products on site.