Chain letters are usually an annoyance, but one going around in Israel in recent days has garnered a great deal of attention – and a sheepish response from Israeli dairy conglomerate Tnuva.
An e-mail – apparently originating with an anonymous Israeli visitor shopping in the U.S. - portrays a huge price gap for made-in-Israel Tnuva cheeses. The shopper discovered that standard Tnuva yellow and feta cheeses were being sold for far more in Israel than they cost in California – despite added shipping costs to move the cheese from the Tnuva Tel Yosef factory to Westlake Village, a Los Angeles suburb.
“As part of the battle against the high cost of living, I decided, while on a trip to the U.S., to go to a supermarket to compare prices,” the email message reads. “When I saw the cheeses on the shelf, I could not believe the prices,” it continued.
The supermarket the anonymous writer chose to visit was discount superstore Costco, which has branches on both the east and west coasts of the U.S. that have a wide range of kosher products, tailored to the needs of members of the religious Jewish communities who patronize the store.
The shopper picked up a two-pack of Israeli yellow cheese (called Emek in Israel, and packaged as Tnuva Edam cheese at Costco), which cost $6.59 – NIS 23 in shekel terms. However, a single 200 gram pack of Emek (light) costs NIS 18 in a typical Israeli supermarket, according to the email – making a double pack in Israel a far more expensive NIS 36.
“The same price difference can be found in feta cheese,” the email continues. A 1.94 pound double pack cost NIS 33 (NIS 16.5 per unit) at Costco – while the equivalent 950 gram double pack costs NIS 53 in Israel.
“Can Tnuva explain this price difference logically, or is it just a matter of hoggish price gouging,” the email asks. “Show them you're not a frier (“sucker” in Hebrew). Just boycott Tnuva cheeses. And send this email on to as many people as you can.” As evidence, the writer attached a receipt from Costco for the items in question.
In response to a rush of phone calls, emails, and requests for comments from reporters, Tnuva issued a statement saying that the price differentials were not its fault.
First of all, Tnuva said, all products sold in Israel are subject to 16% Value Added Tax, while most food products in the U.S. are not subject to an equivalent sales tax of any kind.
In addition, the state reimburses Tnuva 75 agurot for each package of cheese it exports – as an incentive to increase Israeli exports (the company took pains to describe this as an incentive, as opposed to an export subsidy). There are other Israeli products that are often cheaper overseas for the first two reasons, among them clothing Made in Israel.
And, Tnuva said, the cheese being sold by Costco was actually being “subsidized” by the weak dollar; the current agreement between Tnuva and Costco was signed in 2009, when the dollar was trading in the neighborhood of NIS 4.2, as opposed to the current NIS 3.5. “The weak dollar is a problem all exporters have,” Tnuva said.