cheese - Olivier Fitoussi - June 17 2011
A shopper inspecting dairy products in an Israeli supermarket. Photo by Olivier Fitoussi
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Dairy companies Tnuva and Strauss caved in to a nationwide cottage cheese boycott yesterday and announced they would lower the staple product's price to the recommended retail price of NIS 5.90.

"We understood in the last two days the major food chains and dairy farmers are ready to lower prices and decided to do our share as well," Tnuva Group CEO Arik Schor told The Marker.

Schor said Tnuva would sell the curds to the major food chains for NIS 4.55 a container, a 14 percent drop from NIS 5.20. As a result, the product's retail price would drop to NIS 5.90.

Several hours later, the Strauss Group joined Tnuva and said it would sell its cottage cheese for the same price as its competitor. They were followed by the Tara dairy cooperative, which announced the same reduction.

"We can only recommend a retail price to the food chains," Schor said. "Our previous recommended retail price was NIS 6.97 per container but many outlets sold it for NIS 7.20-8.00."

Until now, Tnuva's position has been that it would not reduce cottage cheese prices unilaterally, since that would require cooperation from the dairy companies, dairy farmers, food chains and the government.

Asked why the company had priced the product so high when it could make profits selling them for 65 agorot less per container, he said: "As soon as the other links in the chain - the food chains, dairy farmers, milk production plants - were ready to do their share, we were ready to make a move."

Tnuva and the other dairy companies have been castigated in recent weeks for overpricing other products along with cottage cheese. Consumer groups have complained about the exorbitant prices of white and yellow cheeses, yogurts and dairy desserts.

"The other products will have to wait until the committee appointed by the Industry, Trade and Employment Ministry decides on a comprehensive price solution," Schor said. "This was a cottage cheese protest and at the moment we needed an immediate solution to that."

Zehavit Cohen, CEO of Apax Partners Israel, predicted last Friday Tnuva would not reduce the price of cottage cheese, at least not until the end of the year.

Yesterday however, after the company reduced the price of cottage cheese, she said "all the producers and chains are opening a new era in their relationship with the consumer today. The Israeli consumer has had his say and proved his ability to make an unprecedented change."

Zion Balas, CEO of Strauss Israel, reduced cottage cheese prices but blamed the government for recent developments. "Since the authorities aren't working fast enough to bring about a comprehensive solution for the consumer, we decided to lower the cottage cheese retail price to NIS 4.55," he said.

"We still expect the government, farmers and retailers to contribute their share to the reduction and respond to the consumers' just complaint," he said.

Israel's leading food chain Super-Sol announced as early as yesterday morning that it was lowering the price of cottage cheese to NIS 5.90 a container.

Super-Sol, which in the past few days has been selling two cottage cheese containers for NIS 10, yesterday took credit for Tnuva's price reduction.

"We commend Tnuva for joining Super-Sol's move to reduce the retail price of cottage cheese," said Super-Sol CEO Effie Rosenhaus.

The Facebook-run cottage cheese boycott, sparked when the price of the staple surpassed NIS 7.5 last month, caused a steep drop in sales. The boycott organizers have since expanded their campaign to dairy desserts and yogurts.

Food chain officials said they hoped cottage cheese would be the first of many overpriced products to have its price reduced. "White cheese must be reduced immediately. At Mega we've priced it at NIS 5.49," said Blue Square Israel CEO Zeev Vurembrand.

The big food chains yesterday cuts the prices of various products under government supervision, in a bid to persuade consumers to buy them rather than the more expensive goods. Blue Square, which operates the Mega chains, said it had decided to slash the prices of bread, milk, Eshel, Gil, sour cream, butter, various kinds of yellow cheese and eggs.