Supreme Court orders Kahlon: Prices of dairy products will rise by 3.4%

The Supreme Court ruled on Monday that the prices of supervised milk will rise by 3.4%, in contrast to Finance Minister Moshe Kahlon’s position.

The ruling is a potential political blow to Kahlon, whose Kulanu Party is hovering close to the electoral threshold. Though Kahlon opposed raising regulated prices, as finance minister he will likely carry the brunt of electoral anger over the price hikes. 

This is not the first time the court weighed in against Kahlon’s economic stances. Earlier this year, the High Court ruled to tax tobacco for rolling cigarettes, which Kahlon opposed on the grounds that it would primarily hurt the poorest sectors of society.

Last month, the state informed the court that it agreed to Tnuva’s demand for an increase in the prices of supervised dairy products by 3.4%, while noting that Kahlon had expressed his opposition to the move, in light of the increase in the price of raw milk and in accordance with the recommendations of the Prices Committee.

The state explained in a document that at this stage, the attorney-general claims and believes that the price change should be made by the ministers and that prices cannot be raised at this time, because of the intention to complete the proposed legislation on the matter outlined by Kahlon within three months.

However, it was explained within the document that “the decision to dissolve the Knesset has a real effect on the ability of the ministers to complete the legislative process within the framework of the dates that were handed over to the court. Which justifies the ministers’ decision not to act on the recommendation from the committee who sets prices [for products in Israel], as well as the duty of the outgoing government to act during this period with restraint.”

In early November, Kahlon launched the possible reform in the dairy market. He promised at the time, among other things, NIS 350 a year for each family to go out and spend on dairy products, to improve the dairy sector and to protect agriculture.

Following the decision, Kahlon said that “during the past year, I have refused to sign the increase in milk prices out of the perception that this is a cynical and unnecessary step of a destructive and exploitative monopoly, intended to increase profits at the expense of the public... I regret that the State Prosecutor did not see fit to defend my position in order to prevent this unnecessary price increase. And I intend to order – immediately after the elections – a reexamination of the dairies’ conduct, primarily Tnuva, and the reciprocal relations between them, with all that is implied.”

Following the High Court’s decision to increase the price of milk this morning, Kahlon announced that he would initiate hearings for the purpose of reducing and canceling the import quotas on milk and milk products.

 

“The High Court ruling is a direct hit on the Israeli consumer and family. It is tainted with social insensitivity and a complete imbalance between considerations of money and the public good. The ruling will lead to an unacceptable outcome. The attempt to harm the Israeli consumer, using arbitrary monopolistic power and money, broke new records,” the finance minister said in response to the ruling.

 

Tnuva has stated that it would not implement the price increase until after Passover.