Business in Brief: October 25

Electricity rates to rise 4.7% next week; Osem cuts prices on 35 products; Teva cuts price of infant formula 25%.

electricity plug (photo credit: Rennett Stowe)
electricity plug
(photo credit: Rennett Stowe)
Electricity rates to rise 4.7% next week • By AMIRAM BARKAT
Unless there is a last-minute change, electricity rates will rise 4.7 percent starting from November 1, despite the resumption of natural gas deliveries from Egypt, people familiar with the matter told Globes Monday. At its weekly meeting, the Public Utilities Authority on Monday approved the new electricity rate, on the basis of the dynamic model that was set up this past July, the sources said. According to the model, the rate is calculated at the end of each month, where a change of more than 3.5% in the tariff requires approval. The current large deviation is a result of the complete halt in gas deliveries from Egypt to the Israel Electric Corporation over the last three months. The amount of gas being supplied by Israel’s Yam Tethys reserve has temporarily declined by 30% as a result of water seepage into one of the wells.
Any decrease in gas supply compels the IEC to use diesel or fuel oil to generate electricity, and these fuels are much more expensive than natural gas. The public compensates the IEC for all of its expenses by paying increased rates.
Osem cuts prices on 35 products • Globes correspondent
In the face of a threatened consumer boycott, Osem Investments on Monday announced it will cut the prices of 35 products by 5 percent to 10% on November 1 and will also distribute NIS 5 coupons for Materna infant-formula products. The cottage-cheese boycott leaders are demanding Osem cut prices on products by 30%, especially Materna.
Osem said it would cut prices for ketchup, soup croutons, pasta, powdered chicken soup, soy source and cookies. Its subsidiary Tivall will cut prices on frozen humous and corn, and Sabra Salads will cut prices for tehina. As for Materna, Osem said it would apply the pricing model used in the US, adding coupons to 11 different infant-formula products.
Teva cuts price of infant formula 25% • Globes correspondent
Teva Pharmaceutical Industries announced Monday it has lowered the price of its newly launched infant formula Nutrilon by 25 percent. The price of an 800-gram can will cost NIS 60, compared with NIS 80 for a similar-sized can of its two main rivals, Materna and Similac. Teva said it would charge NIS 35 for a 400-gr. can.
When Teva launched Nutrilon earlier this month, the company talked about NIS 75 for an 800-gr. can of Nutrilon and NIS 46 for a 400-gr. can. Materna and Similac are already available in haredi retail chains for NIS 45 for an 800-gr. can.
Chinese investor gives start-up $30m.
An Israeli start-up company has received a $30 million investment from China’s richest man. Billionaire Li Ka Shing has invested in the navigation-technology firm Waze, which will put the money into supporting its application’s more than 7 million drivers and launch a traffic-reporting platform in China, Globes reported.
The Waze free mobile application helps drivers find the shortest route to their destination and provides data on traffic conditions provided by its users. The company also has a social network allowing drivers to report directly to each other on road conditions. Its users live in 45 countries.
Other shareholders include Microsoft and Qualcomm. • JTA