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The large bakeries have decided to unilaterally raise the price of price-controlled bread by 10.6 percent without approval of the Ministry of Trade and Industry.

The increase comes despite a decision by minister Eli Yishai to reverse himself and not lift price controls on basic bread. Yishai changed his mind only a few days after agreeing to such a move.

Bakery industry sources said that bakery owners exploited a loophole in the law on price supervision. The section of the law allows manufacturers of a product under supervision to request a change in price from the relevant government ministry, and if they do not receive a negative answer, they are entitled to raise prices without the need for approval.

Therefore, bakery owners announced yesterday to the price control supervisor in the Trade and Industry Ministry, Zvia Dori, that they were raising bread prices. They said the move was a response to the steep rise in wheat prices since the start of the year, which has led to a sharp rise in flour costs.

On November 4, the bakers urgently requested permission to raise prices from Yishai and Finance Minster Roni Bar-On.

"Since the request was not rejected, we view ourselves as having received approval to raise prices," an owner said. They further claim that the delay in price hikes has cost them NIS 20 million.

Yishai said he regretted the unilateral price increase and that he intended to use funds allocated to his Shas party as part of the coalition agreements to compensate low-income families.

Yishai asked the ministry's legal adviser to examine the legality of the bakeries' move.

The new prices are: white bread, 350 grams, is NIS 4.60 instead of NIS 4.15; sliced white bread, 500 grams, is NIS 6.15 instead of NIS 5.55; and challah is NIS 5 from NIS 4.50.

The cabinet had recently decided to lift price controls on all bread while providing compensation to low income households.

However, Yishai changed his mind and announced that he would not sign the regulations lifting the price controls, fearing that prices would rise sharply.