Finance Minister Yuval Steinitz (Likud) announced on Sunday he is considering
opening the Israeli market to imported dairy products, and Prime Minister
Binyamin Netanyahu told cabinet members to find solutions to the rising price of
dairy goods, after public outrage over price hikes led to a consumer campaign to
boycott cottage cheese that began last week.
Steinitz said in a speech at
the Caesarea Economic Policy Planning Forum in Rishon Lezion that he was sending
out a warning on cheese products: “If it is indeed true that the cost of cheese
in Israel – whether cottage or otherwise – is double that of equivalent products
in Europe and the Western world, then it is clear that the situation is
intolerable and we will have to rectify it.”
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Comparing the growing storm
over cottage cheese prices to that over the high cost of gasoline, Steinitz
said: “What is the connection between cheese and gas prices? The principle is
We cannot allow the interests of the state or of its citizens
to be trampled on by powerful [business] groups.
“If the situation does
not rectify itself – which is possible given the consumer protest – all steps
will be considered; including removing barriers to importation, and the creation
of real competition, including restoring price supervision. These steps will be
weighed [by the Finance Ministry] in conjunction with the Industry, Trade and
Labor and Agriculture ministries,” he said, adding that he had discussed the
issue with the prime minister earlier the same day.
Last week, Industry,
Trade and Labor Minister Shalom Simhon (Independence) also suggested that his
ministry may open the dairy market to imports in order to lower prices. On
Sunday, Netanyahu instructed his ministers to find a
“[Communications and Welfare Minister Moshe] Kahlon has done
great things,” Netanyahu said. “Be like Kahlon and find
Steinitz’s plan was not wellreceived by everyone, with
Manufacturers Association president Shraga Brosh launching a stinging attack in
which he said the finance minister had no business intervening, and that Israel
would be better off importing a new finance minister than importing dairy
“The finance minister shouldn’t fan the flames.
isn’t Tahrir Square [in Cairo]. To import cheese from overseas is to import
unemployment. I have a better idea. Not long ago the prime minister was on the
search for a new Bank of Israel governor, and the one he found [Stanley Fischer]
was excellent. I suggest that he go and import a new finance minister. It would
be cheaper, more economical and of great benefit for Israeli
Brosh went on to say that while he understands the public
anger over high food prices, it is ignoring the facts with its planned boycott
of cottage cheese, and should direct its anger at what he called “cheap populism” from the government.
“Last August when the budget
was passed they [the government] imposed on us NIS 6 billion in extra taxes. I
said then that it would fall in the end on the consumer. It makes products more
expensive. When the fuel excise is raised, does anybody think that it won’t fall
on the consumer?” Agricultural Minister Orit Noked (Independence) called at a
Knesset Economics Committee meeting for the government to regulate cottage
cheese prices, at least temporarily.
“Removing dairy products from
regulation did not prove itself in recent years,” she said.
cheese is a symbol for dairy products and basic food products. We need to ensure
that every family can buy [these items] at fair prices.”
Noked added that
she plans to meet with Steinitz and Simhon in order to discuss “lowering cottage
cheese prices and restraining basic dairy product prices.”
meeting’s end, the Knesset Economics Committee called for renewed government
regulation, as well as a parliamentary inquiry committee on price hikes and lack
of competition in the food market.
“We’re not talking about cigars or
There’s no reason the public should pay exorbitant prices,”
committee chairman MK Carmel Shama-Hacohen (Likud) said.
is a symbol for a socioeconomic storm, which requires an immediate and urgent
“We all believe in a free market and competition, but we seem
to be in a market free of competition,” Shama-Hacohen said, adding that the
government, dairy product manufacturers and supermarket chains were all
responsible for the rise in prices.
However, he added, “The public sees
the dairy companies as the address for protests. I suggest that you practice
self-regulation,” Shama-Hacohen told dairy manufacturers present at the
The committee chairman also warned against opening the dairy
market to imports, saying that it may have an adverse effect on the Israeli
market, and has potential to cause problems with Kashrut
In response, Tnuva director-general Eyal Malis said that
his company will “cooperate with regulators. If we need to change prices or have
regulation on our products, we’ll do it.”
Malis explained that prices
have risen in the past few years due to rising prices in milk, water, energy and
higher salaries for workers, and said that Tnuva’s earnings have been
“reasonable compared to other countries.”
He also said that Israeli
cottage cheese prices cannot be compared to those abroad “because it is a
different product,” leading MK Amir Peretz (Labor) to interrupt and say: “So
what if cottage cheese outside of Israel tastes bad? Don’t they also make it out
of water and milk? Why should the cost be different? “I am opposed to
privatization, which has brought catastrophes to Israel, and I oppose imports,
which people seem to think is the solution to every problem,” Peretz
“I’m glad that cottage cheese is the straw that broke the camel’s
back, and a protest broke out.
“This isn’t a free market, it’s a jungle,”
Rami Levi, owner of the eponymous supermarket chain,
said that he reduced the price of cottage cheese in his stores to NIS 4.90 since
a Facebook group called to boycott the product, and called for consumers to
continue in their battle.
“I think we need a free, but competitive
market,” Levi said, “but if you want a free market, it has to be free all the
way, and then everything will be alright.” He called for the government to
remove sales tax from food, and said dairy manufacturers are entirely to blame
for a rise in prices.
Yaakov Bracha, representing the Cattle- Growers
Union, said that capitalism “became a religion. It’s impossible to convince the
Finance Ministry that they made a mistake by removing regulation.”
Yisrael Eichler (United Torah Judaism) also lamented the Finance Ministry’s
“cruel capitalism, that accuses the poor of causing their own poverty,” and
praised the consumer cottage cheese boycott and Peretz’s protests against the
MK Faina Kirschenbaum (Israel Beiteinu) was the only
committee member to speak out adamantly against regulation, saying that
“regulators set the highest price for products, and the middle class
“Opening the market will restrain centralization, and will
bring [cheese] to the minimum price,” she said.