Tnuva Hikes Dairy Products Prices

ISRAEL - Tnuva is raising prices for non-controlled dairy products by an average of 2.2 per cent.
calendar icon 6 August 2018
clock icon 2 minute read

Globes reports that after a prolonged struggle against the minister of finance, who refused to sign an order raising prices for price-controlled dairy products, while prices of unprocessed milk were rising, Tnuva has taken action. Israel's largest food and dairy company will raise its prices for products not subject to price controls by an average of 2.2 per cent.

The company declined to state today how much prices would rise for each product or the maximum increase, so there may be products who prices will rise more steeply. The company did say, "The vast majority of products will not go up by more than 3.4 per cent," but consumers will have to wait and see. 3.4 per cent is the price increase recommended by the price committee - the increase that Tnuva hoped to apply to its price-controlled products.

Which products will become more expensive? Tnuva said the list includes salted cheese, yellow shelf cheese, special cheese, delicacies, dairy beverages, and some yoghurts.

Tnuva is also emphasizing that the price of its cottage cheese will not rise, although this is not subject to price controls. Since the 2011 protests over the price of cottage cheese, which severely damaged Tnuva's image, the company has treated cottage cheese the same as price controlled products.

Damage to Tnuva: NIS 200 million

This measure follows months of controversy, including the presence of Tnuva CEO Eyal Malis at a Knesset hearing, lobbying efforts, and a High Court of Justice petition. Between January 2017 and July 2018, the government raised the price of raw milk (the target price) that dairies are legally required to pay to dairy farmers by NIS 0.12, amounting to 10.7 per cent. The price was raised by a further NIS 0.0823 in July 2018 putting the cumulative price rise at NIS 0.2023 per liter.

The company said that the raw milk that it buys according to a government order "constitutes 50 per cent of the cost of production, and the increase in its price has so far caused an average 6 per cent increase in the cost of production for dairy products."

Tnuva claims, "Revision of prices for products not under price control only partially reflects the rise in raw milk prices. In monetary terms, the added cost to Tnuva is NIS 160 million. By the end of the year, this cost will reach NIS 200 million."

Since May, Tnuva has been waiting for the minister of finance to update the price of dairy products subject to price controls by 3.4 per cent, as recommended by a government price committee.

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