milk bags 298.
(photo credit: Ariel Jerozolimski )
The Great Israeli Cottage Cheese Uprising has taken a new and promising turn.
Itzik Elrov, the haredi man from Bnei Brak who started it all back in June,
could not have imagined that his lone Facebook call, spurred by shock at the
jacked-up price of cottage cheese at his local grocery store, would set in
motion a revolution in the local dairy market.
The latest chapter in a
saga demonstrating the tremendous power that can be wielded by engaged and
united consumers is the resignation of Zehavit Cohen, head of the dairy giant
Tnuva. The resignation, pending an investigation by the Israel Antitrust
Authority into allegations that Tnuva might have hidden documents revealing that
it abused its monopoly status to gouge prices, was accompanied by an
announcement by Tnuva, which controls well over half of the NIS 8.6 billion
dairy market, on a 15 percent price cut starting Tuesday. White cheeses, hard
yellow cheeses and pudding are some of the products that will become more
But while it is encouraging to know that the grassroots
protest started by Elrov and picked up by several university student unions in
recent months succeeded in getting the attention of big businesses, the impact
made by Elrov et alia might be even more farreaching, resulting in no less than
a complete revamping of the entire dairy market.
It has been an open
secret for some time that the prices of dairy products here are
disproportionately high. But it took the Great Israeli Cottage Cheese Uprising
to push this fact to the forefront of public consciousness.
in July, just weeks after the uprising began, Prime Minister Binyamin Netanyahu
made headlines when he expressed astonishment during a visit to Romania that
Tnuva cottage cheese sold for NIS 2 less in Bucharest than it did in
Reports released by the Treasury and by the Knesset research
department over the summer provided data on the 45% hike in cottage cheese
prices between 2006, when price controls were removed, and January 2011, when a
250-gram container cost more than NIS 7. In June, Elrov’s grocery store charged
NIS 8. In contrast, the wholesale price of milk increased by less than 10%
during the same period.
These reports, and a thorough study published in
July by Keren Harel-Harari of the Jerusalem Institute for Market Studies, listed
the reasons for the price distortions in our dairy market. Tnuva, Tara and
Strauss – the three largest dairies – as well as other producers of agricultural
products – were said to be exempt from the sorts of anti-trust laws that applied
to most sectors of the economy. Also, various tariffs and obstacles to imports –
such as a 150% to 200% tax on imported milk powder and butter – protected the
local dairy and agricultural market from international competition.
perhaps most disturbing was the revelation that in March this year, the
Netanyahu government – usually so strongly pro-free market – pushed through the
Law for the Planning of the Dairy Market. In the 50-0 vote, the Knesset
ratified legislation reminiscent of now-defunct centrally planned economies.
Instead of allowing free market forces to sort out supply and demand in the
market, a special “quota committee” would determine annual dairy
Though the law gives the industry, trade and labor minister the
authority to open up the dairy market to international competition, Shalom
Simhon, the present minister who is seen as representing the interests of
moshavim, many of which are big producers of milk, has said publicly that doing
so would be ineffective and would take too long.
It appears, however,
that the forces set in motion by Elrov’s Great Israeli Cottage Cheese Uprising
are unstoppable. The same grassroots pressure that brought about Cohen’s
resignation and Tnuva’s hasty announcement of a price cut will inevitably lead
to more substantial and desperately needed changes in the dairy market. And it
all began with one disgruntled consumer who refused to be taken advantage of any