Milk - Moti Kimche - 07.07.2011
Why does milk in Israel cost a third more than elsewhere in the world? Photo by Moti Kimche
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The recent consumer protest over cottage cheese prices has led not only dairy producers to slash their advertising budgets, but other food manufacturers as well.

In the last two weeks, the country's three major dairy producers - Tnuva, Strauss and Tara - reduced their advertising budgets for dairy products by 83%, from a collective $5.7 million for the period last year to $982,000 this year.

In a particularly stark example, in the first week of July 2010, Tara spent $131,000 on ads, while this year it spent nothing.

"Food companies understand that advertising now is like throwing away money," said one media consultant, suggesting that food manufacturers were worried that ads would backfire. "The companies tell themselves that if they launch an advertising campaign for pretzels, for example, people will check to see what happened to the price of pretzels in recent years and decide to boycott them."

The companies don't know where this is leading, said another consultant, and the easiest thing to cut is advertising.

Food industry sources confirmed the cut in ad budgets, saying they would not launch new ad campaigns until consumer anger subsided. "The aim now is to keep a low profile," said a source close to one food company.

When advertising resumes, content could also change, said a media consultant: It could take a more practical approach that stresses a product's value, for example. Even beyond the food industry, in sectors such as telecommunications and gasoline, retailers are reconsidering their options, the consultant said.

In related news, the major dairy companies are expected to announce an agreement today with the supermarket chains on a reduction in the price of some dairy products.