Israel's Shufersal blinks first in battle over Tnuva price hikes

Shufersal is striking back against the bossy food manufacturer by ridding its shelves of Tnuva products for which suitable substitutes can be sold.

 People shop for groceries at the Shufersal Deal supermarket in Katsrin, Golan Heights, on November 28, 2022. (photo credit: MICHAL GILADI/FLASH90)
People shop for groceries at the Shufersal Deal supermarket in Katsrin, Golan Heights, on November 28, 2022.
(photo credit: MICHAL GILADI/FLASH90)

The two-week game of chicken between Tnuva and the Shufersal chain over the price of dairy products ended on Tuesday when the supermarket chain conceded to a price rise on products that have no substitute brands.

“In light of the shortage of the variety of milk products and substitutes available in Shufersal branches and in order not to harm the chain’s customers, Tnuva’s request for a price increase was examined in depth – the request was only partially approved for products for which there are no substitutes in the other brands,” a Shufersal statement read.

“In light of the shortage of the variety of milk products and substitutes available in Shufersal branches and in order not to harm the chain’s customers, Tnuva’s request for a price increase was examined in depth - the request was only partially approved for products for which there are no substitutes in the other brands.”

Shufersal

For the past two weeks, Shufersal has fought a battle against all suppliers who raised prices, including rival dairies Tara and Gad that also hiked prices.

At the end of November, Tnuva announced that it would raise the prices of hundreds of products, including hard cheeses, butter, tofu, soy and oat plant-based alternative milks and several other milk-based products. In response, most supermarkets raised their prices to consumers. The only food retail chains resistant to the move were Shufersal and Yochananof.

 The logo of dairy firm Tnuva is seen at the company's logistic centre in the southern town of Kiryat Malachi May 22, 2014 (credit: AMIR COHEN/REUTERS) The logo of dairy firm Tnuva is seen at the company's logistic centre in the southern town of Kiryat Malachi May 22, 2014 (credit: AMIR COHEN/REUTERS)

Shoppers perusing the dairy aisles found huge gaps where the Tnuva products had been, along with signs apologizing to the consumer and explaining that Shufersal was resisting the price hike and passing the cost on by raising their own prices.

However, with some customers preferring to buy Tnuva products at the new higher prices in other supermarkets, Shufersal was forced to make Tuesday’s decision.

Despite this, however, Shufersal is striking back against the bossy food manufacturer by ridding its shelves of Tnuva products for which suitable substitutes can be sold, including: White Chef products, Yolo, Napoleon, Piraeus, Prili, Carlo, Tnuva Alternative, Delicacies, and some Emek and Sunfrost products.

The price hike took place on Thursday, and consumers can expect to see increased prices within a week or so as old stock is replaced by the next wave of more expensive products.

Why did Tnuva raise prices?

Tnuva’s recent decision to raise prices comes due to the “sharp rise of [the cost of] raw milk,” according to the company. The cost of raw milk has risen by 24% since 2019 and has driven up an additional NIS 400 million in expenses to the company.

Tnuva is a leading food manufacturer in Israel, and many of the country’s food retailers depend on it for dairy products, and Shufersal is no different. The chain’s decision of a partial boycott may yet prove effective, though, given its market share. In that case, smaller chains may well follow suit and adopt a similar stance against the pricier Tnuva.

Until then, dairy consumers would be wise to stock up on cheaper Tnuva products while they can – and given the current situation, it may behoove them to forego the old “reach to the back of the shelf for the newest stock” routine.