Israel to Cap Prices of Two Popular Tnuva Dairy Products

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The prices of 5%-fat soft white cheese and 38%-fat cream produced by Tnuva will be coming under government control because the dairy giant was making too much profit on them, a joint ministerial committee recommends.

A final decision by government remains contingent on a public hearing at which Tnuva can state its case. Anybody from the general public can also testify at the hearing.

Only ten products are subject to price control, including standard bread, unsalted butter (the 100 gram weight) and 3%-fat milk.

The Prices Committee, a joint body of the agriculture and finance ministries, elaborate that the decree, if it passes, will apply only to the high-fat cream and 5%-fat white cheese made by Tnuva, not other companies. "We discovered exceptional profit regarding them, and will lower their prices," the committee stated.

Tnuva, the biggest fresh-foods company in Israel, is controlled by the U.S.-based investments fund Apax Partners.

At present neither 5%-fat cheese nor cream are subject to government price control. The committee's recommendation is based on a report from an external appraiser, and on data from the dairy company itself.

Tnuva found itself targeted by cost-of-living protests starting in the summer of 2011, until it agreed to lower some prices. TheMarker calculated that during in three years during which raw milk prices rose by about 3%, the price of cottage cheese increased by about 40%. Not ony Tnuva's, to be sure, but consumer anger was directed largely at that company, partly because it is the biggest.

Tnuva cottage cheese on display in a minimarket fridge.Credit: Tali Mayer
Modiin residents protesting the price of Tnuva dairy products in a local supermarket in 2011.Credit: Gil Cohen-Magen

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