With the Passover holiday approaching, food manufacturers looking to cash in on high demand tend to hike their prices. First off the mark this year are the chicken slaughterhouses. Several sent revised price lists to supermarket chains this week showing increases of up to 55%, just two months after they last hiked prices.
Milouoff said it is raising its wholesale price for whole chickens by 8.2%; legs and chicken breasts by more than 20%; and wings by 55%. Interestingly, the new prices put out by the Off-Oz slaughterhouse are almost identical to those of its competitor. (“Off” is Hebrew for chicken.)
It’s safe to assume that supermarket chains, vying to boast the cheapest food baskets for the holiday, will absorb much of the increase in areas where competition is fierce, at least. But consumers in remote regions with fewer shopping options might be subject to sticker shock.
“The slaughterhouses and breeders are well aware that every family wants chicken on their holiday plates,” one retailer said, “but what they forget to mention is that the price of chicken products has already risen 75% in the last seven months.”
Another retailer explained that the new prices won’t just hit the chains, but also restaurants, hotels, and banquet halls anyone offering chicken courses. Last year the slaughterhouses and breeders didn’t reach an agreement among themselves so they lost money, he claimed, but this year they apparently became better organized. “The state allows them to make certain coordinated moves and act like a legal cartel since they’re experiencing some difficulties,” he said.
The Israel Antitrust Authority doesn’t believe there’s enough data to prove a cartel, saying it needs solid information before investigating.
Rami Levi, of the “chicken for a shekel” promotion at the supermarket chain bearing his name, thinks prices for some chicken products should be put under government regulation. “The government needs to protect breeders and slaughterhouses, but also make sure that the consumer can buy basic products like chicken,” he argued.
The price hikes are also the result of the slaughterhouses having amassed a great deal of power-control over the entire production cycle, starting with the egg, according to one retailer.
Chicken producers don’t understand what all the squawking is about and claim Israel’s poultry market is on the verge of collapse. They say price hikes were unavoidable after years of losses.
Motti Elkabetz, head of the Israel Chicken Breeders Association, explained that breeders suffered a major crisis in recent years due to excess production. He claimed that, even now, breeders receive just 83% of the target price set by the Agriculture Ministry.
Milouoff CEO Shuki Bashan denied claims of a cartel, saying chicken prices had simply returned to normal levels. He also spoke of rising production costs, noting that the price of poultry feed has increased 25%. “If we had just taken this into consideration, we would have had to raise every item by a shekel, not including all of the other cost increases,” he said. “Everyone’s production costs are similar, and we all suffer the same situation, so there was no choice but to raise the price,” he added. “However, this is clearly a basic product for the public and we’re taking this into account. Therefore, I don’t think there will be another price rise before Passover, and we might even reduce prices after the holiday because demand will also be lower.”