The big dairy manufacturers announced yesterday they would lower retail prices of their products, if Prime Minister Benjamin Netanyahu reduces the prices they pay to farmers for raw milk. The manufacturers are hoping this will win them popularity points with consumers.
There are two problems here. First, it is not clear if or when Netanyahu will cut the price paid to dairy farmers. The Agriculture Ministry strongly opposes the measure, which requires legislative and regulatory changes before it can be introduced. Second, the proposed decrease in wholesale milk prices is just 2.5%. That will have a minimal effect on retail prices, reducing them by just a few agorot per item.
The major dairy manufacturers refused to say Thursday whether they would also cut their profit margins in order to reduce consumer prices.
The next stage of proposed reforms to the dairy industry has been submitted to the Agriculture Ministry, sources close to Industry, Trade and Labor Minister Shalom Simhon told TheMarker yesterday. On Wednesday night Netanyahu accepted recommendations from Simhon and Finance Minister Yuval Steinitz on reducing the amount dairy farmers receive for milk and on opening up the market to more imports. Now the recommendations have to be translated into laws and regulations and go through the legislative process. That is expected to take a long time, particularly in light of the anticipated opposition from special interests.
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