Daily Israel Report

Tnuva Lowers Prices After Government Price Control

Two days after the government announces price controls certain cheeses, Tnuva dairy decides to lower prices for all white cheeses.
By Elad Benari
First Publish: 1/2/2014, 6:15 AM

Dairy products
Dairy products
Flash 90

Two days after the government announced that it would impose price controls on 5% cream cheese and 38% whipping cream, the Tnuva dairy announced on Wednesday that it would lower prices for all white cheeses and some whipping creams, including those not under control.

According to the Globes business newspaper, Tnuva’s move was a preemptive one and was a result of the company’s concerns over lower sales of non-price controlled dairy products.

Following the move, the price of 3%, 1/2% and 9% fat white cheese will be NIS 5.11 per container, the same price as for 5% white cheese, which is price controlled.

The price of flavored white cheese will fall to NIS 5.50 per container, NIS 0.40 more than the price of price-controlled 5% white cheese. Tnuva hopes to maintain sales with this differential, noted Globes.

Tnuva has also lowered the recommended retail price for a 250-milliliter container of 32% fat whipping cream by 16.4% to NIS 7.59; it has cut the price for a 250-milliliter container of 15% fat whipping cream by 9.1% to NIS 8.25; and cut the price for a 250-milliliter container of 10% fat whipping cream by 13.3% to NIS 8.25.

The company said in response, "Following the regulator's decision, Tnuva has decided to cut prices on basic food products, which are not price controlled, in the hope that retailers will pass on these price cuts to consumers."

At a press conference Monday, Finance Minister Yair Lapid (Yesh Atid) and Agriculture Minister Yair Shamir (Likud Beytenu) said that they had decided on the price controls after reviewing information provided by Tnuva.

“The price cut on these items was made possible by a lowering of profits on these products by producers, as well as a reduction in the discounts given to supermarket change,” they said.

Lapid added that he and other ministers were concerned with the situation of the middle class. “A whole generation is being lost” because of the high cost of living, he noted.

In 2011, tens of thousands of Israelis protested high prices in what was subsequently dubbed “the cottage cheese protests.”

Masses of Israelis boycotted dairy and other products, forcing producers to lower prices on many products, albeit temporarily. In early 2013 it was announced that cottage cheese – and all other dairy products – were going up in price by an average of 3.5%.

Lapid, meanwhile, has come under criticism for choosing to control the prices of a non-essential product like the whipping cream.

This criticism has come mostly from the opposition. In particular, MK Shelly Yechimovich (Labor) slammed Lapid on Tuesday for failing to cancel a fare hike in public transportation - an essential service used mainly by students and older people.

"No one is calling a press conference over this issue, such as the strange one Lapid held yesterday about the cheese and the whipping cream," she said. "This just 'happens,' after Lapid refused to freeze the fare increase.”

Yechimovich added sarcastically, “If you don’t have money for the bus, start drinking 38% whipping cream.”