One day after the price of cost-controlled breads rose 6.53%, executives in the food industry are warning that prices for other food items are destined to go up as well.
"The dam was burst," said Zeev Vurembrand, CEO of the Mega supermarket chain. "For a long time manufacturers and importers have been trying to raise prices and we've stopped them. No manufacture or importer wants to be the first to raise prices, because of the social protests and the slowdown in consumer spending."
Now that the government has authorized a price hike for a staple product the food industry has a green light to follow suit, Vurembrand said.
Prices for food commodities such as grains and meat are rising, and the industry is feeling pressure to pass along the higher costs to consumers, Vurembrand said, adding that the pressure will start building around the High Holidays, in September and that given the balance of forces retailers will be unable to resist.
Eyal Ofer of the Yisrael Yekara Li consumer movement blames the supermarket chains as much as he does the manufacturers and importers.
"That's exactly why we don't need price controls," Ofer said, adding, "The minute the government gives in to their machinations and approves a price increase it gives them an official seal of approval to raise their own prices. Everyone uses it."
Vita Pri Hagalil CEO Oshik Efraim admits that producers are already getting ready for price hikes. He estimates the increase will in the range of 3% to 4%, citing higher costs for raw materials and the weakness of the shekel that have all cut into profitability.
"We're going to begin approaching the [supermarket] chains very soon and decide which prices we will be increasing, so that by the end of the holidays [prices will already be higher," Efraim said.
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