Yair Lapid .
(photo credit: Reuters)
Finance Minister Yair Lapid and Agriculture Minister Yair Shamir signed an order
yesterday placing price controls on 5 percent soft white cheese and 38% whipping
cream. Following the move, the prices of the two products should go down by
The recommended price of a 250-gram container of 5% soft white
cheese to consumers is NIS 6.54. With the introduction of price controls, the
price should fall to NIS 5.23. The recommended price to consumers of a 250
milliliter container of 38% whipping cream is NIS 8.23 and should fall to NIS
At the same time, prices of dairy products under supervision,
including milk in sacks and cartons, will fall by 1.1%.
The price of a
one liter carton of milk will drop from NIS 6.11 to NIS 5.90. This is due to
changes in production costs less a temporary price hike of 3.5% to consumers and
4% to dairies that was approved in October 2012.
“Price controls are not
a solution in the long term,” Lapid said at a press conference, “but we will not
hesitate to use price controls if we find that the lack of competition in the
market is being exploited to make excessive profits at the consumer’s expense.
All players in the market should know that if they try to raise profits to an
unreasonable level and behave aggressively toward consumers, we in turn will use
all tools at our disposal in order to bring the prices down to a level that
consumers can afford. We will ensure that the cost of living in Israel comes
down, because the public can no longer make ends meet.”
Shamir said he
warned Tnuva several months ago to lower prices, but they did not agree. He said
his decision was intended to show Tnuva and other companies that they would be
“The move reflects the Agriculture Ministry’s
commitment to reducing the cost of living in Israel,” said Shamir. “The
companies have to know that we mean business.”
Cream and white cheese are
in the dairy categories that have the fewest producers.
Tnuva has a 50%
share of the white cheese market and, together with Strauss Group Ltd. and Tara,
holds 90% of the market. Tnuva has 70% of sales in financial terms in the 38%
The decision follows an examination of the market by an
external accountant appointed by the government, which found that the profits
made by Tnuva on these two products was “exceptional and
Tnuva issued a statement accepting the price reductions
but saying that they would force the company to offer fewer discounts to
supermarket chains and grocery stores.
Itzik Alrov, who led protests that
led to cottage cheese prices falling three years ago, said adding a few items to
the list of products with prices set by the government would not be very
“It’s like giving an aspirin to a cancer patient,” said Alrov,
who currently heads a consumer lobby called “Hatzarchanim” (The Consumers in
Hebrew). “It won’t stop food prices from going out of control.”
Itzik Shmuli, who was one of the leaders of the socioeconomic protests of 2011,
said much more needed to be done to lower the cost of living.
the lower price for whipping cream, but I don’t think the Israeli middle class
voted for Lapid just to get whipping cream prices lowered,” Shmuli said. “He has
many more challenges, including the housing crisis, rehabilitating the welfare
and health systems, and easing socioeconomic gaps. A year after the election, he
has failed all those tests.”Globes contributed to this report.