One of Israel’s largest food producers announced Monday a wave of price increases for a wide range of its products, as inflation continues to drive up the cost of living at rates not seen in over a decade.
Tnuva, the largest dairy producer in Israel, said Monday that it will be raising the wholesale prices of its products by an average of 4.7%.
The price hike is set to go into effect next Tuesday, the company said, citing increased overhead to explain the price increases. Energy and water prices have both risen significantly, the company noted, as have the prices of soy beans and oats, used both to feed cattle for dairy production, and for the production of non-dairy milk alternatives.
Tnuva said the price hikes were overdue, emphasizing that while the price of raw milk has risen by 24% since 2019, or nearly half a shekel since 2019, the company has not increased the prices for products outside of the price-control basket, in which prices are fixed by the government.
While Tnuva has exempted some products from the price increases – including some yoghurt products, some of its soy drinks, cottage cheese, low-lactose and lactose-free milk – the prices for most of the company’s products will be raised on November 22nd.
Following two years of government-imposed COVID restrictions and increases in the money supply from stimulus spending, the inflation rate has risen significantly over the past year, rising from an average of 1.0-1.5% prior to the pandemic and 2.0% by late 2021 to 4.6% this September.
According to data released earlier this month by the Central Bureau of Statistics, the real average income declined by 0.4% from August 2021 to August 2022, despite a 4% increase in nominal terms, due to the higher-than-average inflation rate.
Despite the inflationary pressure, food producers and retailers have been reluctant to impose price hikes, which have already sparked a backlash from consumers.
In October, the Shufersal supermarket chain said it is refusing to cooperate with producers’ plans to raise prices, announcing it will no longer offer products from the Tara dairy producer, a rival of Tnuva.
In July, Prime Minister Yair Lapid held talks with senior government officials, calling for steps to curb planned price hikes for bread, after wheat prices soared amid shortages caused in part by the war in Ukraine