Yishai backs down on bread price hike

Bakeries across the country announced they will enforce their right to raise the price of controlled breads.

By SHARON WROBEL
December 12, 2007 08:33
1 minute read.
eli yishai with ovadia picture behind him

Yishai 248.88. (photo credit: Ariel Jerozolimski)

 
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The Industry, Trade and Labor Ministry on Tuesday was forced to back down and accept the unilateral move by the bakery owners announced last week to raise the price of controlled breads by 10.6 percent beginning this week. "The law was on our side," said Yohanan Aharonson of Davidovich Bakery & Sons Ltd. and head of the Bakers' Association. "There is a clause in the price supervision law which states that in cases in which the manufacturer asked the government for a change in prices and did not get a negative response he is entitled to adjust prices accordingly." On Tuesday, the legal adviser of the Industry, Trade and Labor Ministry confirmed that the unilateral move taken by the bakeries was in line with the regulations set in the price supervision law and will take effect from December 14. In response, Industry, Trade and Labor Minister Eli Yishai, said he was pushing a NIS 50 million bill for approval by the Knesset Finance Committee, which will be allocated to compensate weaker social groups impacted the most by the move. The NIS 50m. compensation fund is expected to be transferred from the coalition budget of Shas. Last week, bakeries across the country announced they will enforce their right to raise the price of controlled breads, which include plain white and dark bread - sliced and unsliced - as well as halla baked for Shabbat, referring to the legal loophole in the price supervision law. In a letter sent by the Bakers' Association's legal adviser to Zvia Dori, supervisor of prices at the Industry Trade and Labor Ministry, the bakery owners stated that since their request for raising prices was ignored they were entitled to exercise their legal right to raise prices of controlled breads unilaterally. Back in November the government approved a temporary compensation package to assist low-income families to cope with rising bread prices, which was the first step toward reforms that would transfer pricing from government control into the hands of the countries' bakeries. However, at the end of last month, Yishai had rescinded his decision to lift bread prices out of government control, saying that bakery owners were planning to raise prices at an "unreasonable" rate.

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