Israeli Dairy Giant Raises Prices for Products First Time Since the 2011 Protests

For the first time since 2011 – when tens of thousands of Israelis poured out into the street to protest the high cost of living – Tnuva is raising the price of dairy products, although not for cottage cheese, whose price hike seven years ago sparked the protests.

Tnuva, Israel’s biggest food maker and the dominant company for dairy products, said the increase would average 2.2% and include a range of price-controlled products like packaged yellow cheese, specialty cheeses, chocolate drinks and some of its yogurts.

To really understand Israel and the Middle East - subscribe to Haaretz

The price hikes announced by Tnuva are for products not price controlled. Among the biggest increase will be for Napoleon brand cream cheese, which goes up 3.3%, and Choco Tnuva, which will rise 3.1%.

The company blamed Finance Minister Moshe Kahlon, who refused to abide by a government price committee’s recommendation to allow the price of controlled dairy products to go up 3.4% in the wake of several increases in the government-controlled price of raw milk.

• Was Israel's 2011 Social Protest Movement Too Successful?
• Israel’s Rating Upgrade Ignores Critical Aspects of Its Economy
• Business in Brief: SodaStream Shares Soar as Net Profit Climbs

Over the 18 months to June, the price of raw milk has been increased by 12 agorot (3 cents) and was raised again last month by 8.23 agorot, for a total increase of 10.7%. Tnuva, which has been coping with declining profits and market share, noted that milk accounts for about 50% of the cost of most dairy products and overall increased the company’s costs by 160 million shekels so far this year.

Tnuva petitioned by the High Court of Justice to order Kahlon to approve the price increases and the court set a September 20 date for the first hearing. Sources at Tnuva said the finance minister for political reasons didn’t want to be seen signing an order allowing price hikes.

A source at the treasury, speaking on condition of anonymity, rejected that interpretation, contending that Tnuva intended to raise the price of non-controlled products after the price of controlled products had been hiked.

“For the moment, Kahlon has saved the public a price hike for controlled goods, which are in any case the basic products that every household in Israel needs,” the treasury source said.