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Strauss Dairies has raised the prices of its dairy products by an average of 2.9 percent, after the government raised the prices of regulated milk and dairy products an average of 2.2 percent. Rival dairy products manufacturer Tnuva raised its prices by only 2.2 percent.

Sources in the sector said Strauss Dairies, which has fewer products than Tnuva in the range of goods regulated by the state, took advantage of the opportunity to raise its prices to compensate itself for the discounts it recently had to award the Supersol chain of supermarkets.

Supersol and Strauss recently fought a widely publicized battle, which culminated in the retail giant removing Strauss' products from its shelves until the matter of greater discounts was resolved. Strauss believes the discounts that were drawn out of the company from that battle may have to be repeated for other retailers. Hence the seizing of the opportunity to raise its prices.

CEO of Strauss Dairies Gadi Lessin said on Wednesday that the higher prices for the company's products was due to the dearer cost of milk and production costs.

He denied any link between the higher prices and the battle with the retailers, describing any such suggestion as serving only to mislead the public.

Sources in the industry say the milk used in the dairies' product lines has indeed become more expensive, by 4.5 percent to 7 agorot a liter. To compare, Strauss has raised the price of its yogurts by 3.2 percent (or 10 agorot a pot).

Sources in the sector believe the Supersol episode cost the dairies dear, and forced the company to increase its discount to the retailer from 1.5 percent to 2.5 percent of the manufacturer's sales to the chain. During the battle, Supersol removed half of Strauss' products from its refrigerated shelves throughout the country.