Israel’s Embattled Food Industry Fires Back

Top executives defend themselves against price gouging, unhealthy products and a hostile media and government.

An Israeli supermarket.
Alon Assayag

Israel’s food industry has become a whipping boy. The price of cottage cheese became a cause célèbre five years ago with the social justice protests. The high cost of food is the object of a government crackdown, including measures to create import competition for products like cheese and dry goods, and to rein in the power of the biggest food makers. Food sales have been dropping and one major supermarket chain, Mega, plunged into bankruptcy last year.

And if the war on high prices isn’t enough, more recently the government has launched a campaign urging Israelis to forswear salty snacks and other unhealthy food. Consumers have been shunning processed meat and hummus in recent months amid health concerns.

This week the beleaguered industry had a chance to fire back at its annual conference at the Kfar Maccabiah Hotel in Ramat Gan. In its defense, it cited everything from Zionism to its role as a strategic national asset, its role as employers in the economically distressed outlying areas of the country and even relations with Turkey and the 2006 Second Lebanon War.

Food company executives used the platform to explain, once again, why they are not the bad guys in the story, and why the protests against the food industry, including high prices and unhealthy foods, are baseless. The subtext that ran through the speeches was that even if some of the claims against the industry are to an extent justified, consumers really cannot get by without the Israeli food industry.

“Everyone knows that the high cost of living isn’t due to cottage cheese,” said the president of the Manufacturers Association of Israel, Shraga Brosh, in opening the conference. “We must understand that manufacturing costs in Israel are higher than in other countries.”

Brosh cited higher local property taxes, lower productivity and higher wages as some of the causes. He also made reference to a controversial remark made last summer by Raya Strauss, once a major shareholder in the Strauss Group, in which she told people to stop complaining and stop eating tomatoes if they were too expensive.

Israel has an abundance of fruits and vegetables, you don’t have to stick to tomatoes, said Brosh. “Even though all [Strauss] tried to say was: ‘Let’s stop crying, and if cottage cheese is expensive then let’s not eat cottage cheese today’ – but it’s a long way from that to boycotting Tnuva [the major dairy and food producer]. We need to treat Tnuva with respect. Because when [Tnuva CEO] Eyal Malis showed me how many moshavim and kibbutzim raise milk, eggs and meat for Tnuva, I understood the importance. So go slowly with all these [attacks].”

‘Simpler to import a finance minister than cheese’

“It’s simpler for the people of Israel to import a finance minister than cheeses,” said Brosh. “Tnuva and Tara both can import cheeses better than any other importer, instead of investing money in local factories. Should they have told Tara that they are going to approve the import of cheese from Poland, so [Tara] would invest less in its new dairy? After all, in times of war, does someone guarantee us that ships with food products will arrive here? Will anyone want to come to us? Who do they want us to depend on – Turkey? The food industry is a fact and a strategic asset. During the Second Lebanon War the port was closed for 45 days.”

The shock that has hit the food industry lately is what seems to have brought Brosh to make a slip of the tongue, which he was forced to apologize for just a few hours later. “When I learned from my mother how to make herring, it had seven tablespoons of sugar and you couldn’t stop eating it,” said Brosh. “I very much hope that the food companies join up with the chief scientist [at the Economy and Industry Ministry] and find a replacement for sugar, but the consumer will need to decide if she wants it. I’m telling them, there is no replacement for sugar in my dear departed mother’s fish. I like to drink sweetened drinks, so let them write on the product what’s in it and let me decide what I like. What am I, a retarded child? It tastes better.”

Shraga Brosh
Ofer Vaknin

Later, the Manufacturers Association sent an apology in Brosh’s name for using the word “retarded.”

“I would like to apologize for an inappropriate choice of words. Of course, I did not intend to hurt anyone. My intention was to say that adults have the freedom and ability to choose what to eat, and what not to,” read the statement.

‘No unhealthy food, only healthy and heathier’

Itzhak Tamir, chairman of the Food Industries Association and the former CEO of the Central Bottling Company, the local Coca-Cola bottler, explained why Israel cannot exist without a strong local food industry: “Even with all the attempts to turn the food industry into an import industry, the Israeli consumer still prefers Israeli food and seems to be smarter than his leaders. A country like Israel, in its special situation, cannot exist without a food industry. It is impossible to allow ourselves to not have a food industry in a country such as Israel in the present [geopolitical] situation.”

Last week, Tamir told a panel discussion on sustainable food systems that “we need to remove the concept of unhealthy food from our vocabulary. There’s no such thing as unhealthy food if the Health Ministry has approved it. Unhealthy food is not legal and can’t be used or sold. There’s healthy food and there’s healthier food.”

Tnuva CEO Eyal Malis.
Ofer Vaknin

Many of the industry speakers chose to speak of feelings they have about the harsh criticism their companies suffer in the media, from consumers and government ministries. “I must say that the feelings over the last five years, since the social justice protest, have not been pleasant,” said Malis. “The protest was painful and hard, certainly for us at Tnuva – we were the symbol of the protest. Tnuva managers felt uncomfortable in the spotlight and being shouted at from all directions Today we’re dealing with a more sensitive and demanding customer, and one who changes. Today we as a company are much more attentive to consumers. They are in effect present in every meeting we conduct.”

A large part of the conference was devoted to the issue of health, which is keeping food companies busy today as sales of products perceived as less healthy, like prepared salads and processed meats, have plummeted. In addition, the Health Ministry is discussing imposing limitations on the manufacture and marketing of unhealthy products.

But Prof. Eyal Shimoni, vice president of technology at Strauss, said the Health Ministry is making a mistake about the food industry and is creating a public discourse that damages the industry – and as a result, harms consumers, too.

“When you create an atmosphere of ‘good guys versus bad guys,’ you create a situation in which the food industry wants to consult with recognized experts in the area of nutrition or medicine, or hire the best professionals, but they don’t want to be connected to the food industry. I find myself approaching experts in nutrition and other fields, and the second sentence I have to express is that they shouldn’t be afraid because I won’t say publicly that they helped me. People don’t want to be linked to food companies because of the atmosphere, and that’s a shame because we want to be helped by experts in order to improve,” Shimoni said.

“In the end after all, people will go to the supermarket and buy the food products they eat. The Health Ministry needs to create a constructive atmosphere. When you use the expression ‘industrialized foods’ time after time, you need to understand there is healthy industrialized food and unhealthy industrialized food. It’s very confusing for the consumers when everything that is in a package is immediately industrialized and unhealthy. It is so not true, and the Health Ministry is responsible.”

Health Ministry Director General Moshe Bar Siman Tov was asked why his ministry ended the ad campaign against junk food sooner than originally planned, and whether it was a result of being scared off by the strength of the reaction to the campaign.

“We ran the campaign because a deep change is needed,” he said. “We see the data, in which one out of every two adult Israelis suffers from obesity and the morbidity associated with it, which we haven’t seen in the past. We thought it was correct to moderate our action, not because we are afraid but out of a feeling that there is real willingness on the part of the industry to change, and we want to take full advantage of this willingness and give it a chance. We saw the power and the strong public debate over it.

“Our test will be in the end if we cause the industry to change. I felt that if we were at war with the industry maybe we would be in more headlines, but the change will take longer. But I want to emphasize that even though it is preferable for the change to come in cooperation with the industry – it will not be a voluntary change. The food industry is not the tobacco industry. It needs to remain, but we want the food it produces to be healthier than it is today,” said Bar Siman Tov.