Investors weren’t amused by local consumers’ idea of targeting Strauss after hearing that New Jersey residents can buy the company’s Pesek Zman candy bars for less than half of the price in Israel.
The company’s share dropped 3.5% in trading on the Tel Aviv Stock Exchange yesterday, while the rest of the market gained between 0.3 and 1%. In total, the company lost NIS 170 million of its market cap.
Total turnover in the company’s stock was NIS 7 million, about twice the average even though trading on the exchange as a whole was a deathly low NIS 660 million.
Consumer boycott initiatives had started taking shape over the weekend, after an incriminating photo uploaded to Facebook showed that Pesek Zman could be purchased for the equivalent of NIS 2.70 at a New Jersey ShopRite.
Meanwhile, the candy is listed for NIS 6.90 on the Mega supermarket chain’s website.
“If the snowballing protest we saw on Facebook and in the media over the past few days keeps gaining strength, Strauss will need to respond, regardless of whether the protest is justified,” said Clal Finance analyst Tzahi Avraham. “If consumers think Strauss’ prices are inflated, that will damage the brand.”
Avraham said, however, that he wasn’t fazed when hearing that Strauss was selling its products for less abroad. “Its market share abroad is negligible, so it is choosing to export at lower prices and lower profit margins,” he said.