After a week of substantial pressure from government authorities, community leaders, and the Israeli public, the Osem Food Company has decided to cancel its planned increase in the price of its products.
“Our decision to increase the prices of some of the company’s products was due to heavy increases in the prices of raw materials, packaging and transportation costs worldwide,” said Avi Ben Assayag, CEO of Osem-Nestle Israel. “However, the complex situation of many consumers in Israel and the public mood have led me to the conclusion that we must cancel the rise in prices and absorb the full cost. I am convinced that this move will contribute to the strengthening of the long-standing alliance we have built and between our millions of loyal consumers.”
Those consumers raised much concern earlier this week, when the company initially announced its intention to increase some of its prices by as much as 5%. The company lamented the increased logistical costs involved in the manufacturing process.
“This is unprecedented,” the company said. “After an extended period during which we have absorbed the price increase, we are forced to update our retail prices.”
In the days following the announcement, government bodies pushed back against the food manufacturer’s decision. Kiryat Malachi Mayor Eliyahu Zohar announced that the municipality would boycott Osem products, suggesting that an increase in price could harm the population’s financial stability.
“Every elected official must take a value-based and unequivocal position that we will not allow the Israeli family to be harmed,” said Zohar. “The money of my residents is not worthless.”
Finance Minister Avigdor Liberman and Economy Minister Orna Barbivai penned a letter to food producers across the country including Osem warning against raising prices, and threatening to take measures to prevent unnecessary price inflation in the industry.
“Your announcement of a price increase at this time is cynical and offensive to the citizens of the country,” the ministers wrote.
While Osem’s decision to cancel its price-hike may bode well for consumers who enjoy its products, there is still a looming threat to the financial stability of low-income residents. As of February 1, both gas and electricity prices were raised by government authorities. The prevention of the increase in prices of one brand name does nothing to reduce the cost of these basic utilities.
In a special Knesset meeting held on the recent wave of rising prices, the president of the Chambers of Commerce, Uriel Lin, pointed out that the government has played a significant role in raising the cost of living in Israel.
“Where do [those taxes] come from?” he asked. “From the air? Does [the government] not understand that they are raising the cost of living?”