Netanyahu
Prime Minister Benjamin Netanyahu in the Knesset on June 15, 2011. Photo by Emil Salman
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Prime Minister Benjamin Netanyahu yesterday asked the Ministers of Finance, Agriculture, and Industry, Trade and Labor to present him with their conclusions on the idea of opening the dairy market in Israel to competition.

Netanyahu said the data he has been given shows that all basic food items whose prices rose beyond the increase in the Consumer Price Index are items that are not open for importation. On the other hand, items whose price increased below the CPI are items that can also be imported, suggesting that competition works.

Speaking at a Likud meet yesterday, Netanyahu said: "I received today a table comparing the prices of select items and services during the past five years in relation to the CPI. What went up and what went down. We see here clearly that the items which were exposed to competition by imports dropped [in price] substantially below the CPI, and those not [pressured by competition] rose.

"Nearly at the top of the list are dairy products," Netanyahu said. "I asked the Finance Minister to consult with the Ministers of Industry, Trade and Labor and Agriculture and examine opening the dairy market to competition. I asked that they bring me their recommendations this week. This may be one way of dealing with this problem."

The Knesset State Control Committee yesterday asked State Comptroller Micha Lindenstrauss to investigate the conduct of the Committee for Price Controls, which is a joint committee of the Ministries of Finance and Agriculture, as well as the considerations and market elements that are influencing the committee.

Lindenstrauss said that the blow to the weaker socioeconomic classes is unacceptable and that the probe will begin in the coming days.

Uri Tzuk-Ram, who is charged with strategy and price controls at the Agriculture Ministry, said at a meeting of the Knesset State Control Committee that they should consider restoring price controls on cottage cheese. He said there are 10 items currently under price controls, including milk in plastic bags and cardboard packaging, eshel-type yogurt, butter and yellow cheese.

Tzuk-Ram noted that "following the lifting of price controls, additional products that were less expensive were developed, and when we saw the price of cottage cheese increase we warned the dairy companies, and especially Tnuva - which holds about 70 percent of the dairy market. Tnuva stayed with the price that was set but the other dairy companies raised the price, with the supermarket chains taking advantage of the situation and raising the prices also for Tnuva's cottage cheese."

Shira Greenberg, who holds the agriculture portfolio at the budget department in the Finance Ministry, added that there has been a drop over the years in the level of market dominance of Tnuva in the dairy market.

Attorney Yaron Levinson, who heads the Consumer Authority at the Histadrut Labor Federation, said the committee "must protect the consumers too and not only the producers or the supermarket chains."

However, Yigal Achtenberg, of the Public Trust NGO, charged the Antitrust Authority of ignoring the coordination of prices.