diapers - 07122011
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The cost of Huggies diapers at supermarket chain Mega is back up again, some months after the summer's cost-of-living protests subsided.

When the masses took to the streets, diapers were one of the many products that came under fire. Mega then started importing Huggies from Turkey, instead of buying them from the brand's Israeli manufacturer. The move enabled the chain to lower prices to NIS 36 per package - less than the price of Huggies manufactured locally by Holga-Kimberly.

Holga-Kimberly is partly owned by Nochi Dankner's IDB group, which also controls Mega's biggest rival, the Super-Sol chain. IDB owns 49% of Holga-Kimberly through subsidiary Hadera Paper.

While Mega said it had been importing diapers on its own in an attempt to lower prices, sources said the real reason was a conflict with Holga-Kimberly. Mega had sent the diaper maker and other suppliers a bill for millions of shekels due to "the chain's eroding profitability."

While other chains argued that Mega couldn't keep up with the imports for long, Mega responded that this was a long-term strategic decision and denied accounts that a reconciliation with Holga-Kimberly would halt the imports.

Now, in the wake of an agreement with the local manufacturer, Mega has stopped selling Turkish diapers, according to a source close to Holga-Kimberly. Under the recent agreement, Mega will return much of the millions of shekels it one-sidedly decided it would not be paying the supplier.

Sources close to Mega denied this, and said it was possible that the international parent company Kimberly-Clark intervened with the imports, since every local manufacturer has the international company's permission to distribute only within the country.

More than 300 million Huggies diapers are sold in Israel every year. Mega sells 15% of that, meaning it buys 45 million units from suppliers every year.

Mega's price cut drove other retailers to cut their prices on both Huggies and Pampers diapers, but a check by TheMarker found that prices are back up again. After cutting prices to NIS 36 in July, Mega is now selling Huggies for NIS 55.99 a package - or two for NIS 100.

Super-Sol, which started selling Huggies for NIS 38.80 a package in the wake of Mega's price cut, is now selling them from NIS 49.59 each.

Rami Levi cut its prices to NIS 35.90 in July, and now charges NIS 38.99.

Kimat Hinam had been offering club members two packages of Huggies diapers for NIS 90 and single packages of Pampers for NIS 38.99 over the summer, but is now selling Pampers for NIS 59.90 and Huggies for NIS 54.80 each - or NIS 105 for two.

Prices at Super-Pharm are similar to what they were in July. Meanwhile, Super-Sol, Mega and Rami Levi have stopped advertising their diaper prices on their websites.

In a response, Mega stated that it had run out of Turkish diapers, and that the imports were not always available. Holga-Kimberly declined to respond.