Groceries will have to divulge dairy profits
Measure was recommended by the interministerial committee on prices, and is intended to determine who is marking up dairy products, and who is profiting.
Supermarket chains and dairies will have to report how much money they’re making from dairy products that used to be under government price control, Agriculture Minister Orit Noked ruled yesterday. The mandate will go into effect once the finance minister signs it.
The measure was one of those recommended by the interministerial committee on prices, a partnership between the agriculture and finance ministries, and is intended to determine who is marking up dairy products, and who is profiting, in the wake of last summer’s protests over high prices.
Since price controls were dropped from these products, their prices have soared by tens of percentage points.
If certain players in the supply chain are found to be making unreasonable profits, some of these products may be brought back under government price control.
Currently, 10 dairy products are under government price control, including milk in cartons and bags, 100-gram sticks of butter, Eshel and Leben cheeses, and Emek and Gilboa yellow cheeses sold by weight.
For another 12 products, price regulation was dropped over several years, but the dairies still need to report how much money they’re making off them. These products include cottage cheese − the focus of last summer’s protest − packaged yellow cheese, Milky pudding cups, cream and white cheeses.
However, reporting had been irregular, and was done only when regulators asked for figures.
Now, once the order goes into effect, supermarkets will also have to state once a year how much money they’re making off these 22 goods. In addition, the dairies will need to submit regular profit reports for these goods.
Following the protests, the dairies and the supermarkets have tried to implicate each other for the soaring prices.
While many links in the dairy supply chain are regulated by the government, no data had been available on the role of retailers, Noked noted.
Dairy products in Israel are very expensive compared to OECD averages, partly due to a lack of competition, the Bank of Israel stated in a report published a month ago. The Trajtenberg committee suggesting plans for social and economic reform came to a similar conclusion.
In 2008, Israeli consumers paid 44% more for their dairy products than the average in OECD member nations, the bank noted. That year, food prices were 15% higher in Israel than the OECD average.