Last update - 00:00 05/07/2007
Shops report price-controlled bread shortage due to flour price hikes
By Motti Bassok, Haaretz Correspondent and Haaretz Service
Markets and grocery stores announced Thursday morning a severe shortage in price-controlled bread.
The Angel and Berman bakery chains have stopped baking the bread after Prime Minister and former acting finance minister Ehud Olmert along with Industry, Trade, and Labor Minister Eli Yishai extended an order fixing the market price of the bread for three months, until the end of September.
The extension of the order prevents bakeries from raising the price of bread in order to keep up with the global price of flour, which has increased by more than 30 percent in the last month.
Bakeries had sought approval to raise the cost of price-controlled bread by 8.3 percent.
The finance and industry ministries decided on Tuesday to seek the help of an external economics advisor who would help determine a new price for the bread.
However, the bakeries saw this move an attempt by the government to buy time. Even before the hike in world flour prices, the bakeries complained that they were losing money on price-controlled bread.
There are 16 industrial bakeries in Israel today, eleven of which belong to three owners: Angel, Berman, and Aharonson and Davidovich. In total, consumers in Israel spend some NIS two billion on bread each year. Some NIS 350 million is spent on price-controlled bread specifically.