Unsupervised Cottage Cheese Prices Cost Israeli Shoppers NIS 760m in 3 Years

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The failure of the government to impose price controls on cottage cheese cost Israeli shoppers some NIS 760 million in the three years before the social-justice protests broke out in the summer of 2011, The Israel Consumer Council said yesterday.

The ICC said that during 2008 through 2011, prices of cottage cheese rose between 30% and 40%, while the prices of controlled products increased only 10%. The difference came at the cost of shoppers.

The rising price of cottage cheese − regarded as a staple of the Israeli diet − sparked a consumer boycott three years ago that evolved into a summer of tent camps and protests over a wide range of consumer and economic issues.

In a report last year, the state comptroller faulted regulators for ignoring how changes in controlled prices affected the prices of unsupervised products. It also said officials failed to take into account public opinion or consumer welfare in making their decisions.

“Poor decisions were taken through improper procedures, which resulted in dramatically higher prices for products that had been taken off supervision,” said Ehud Peleg, an attorney who serves as the council’s CEO. “If we don’t immediately take the steps the ICC is seeking and don’t adopt the state comptroller’s report, the public will continue to pay millions of shekels out of its pocket.”

The ICC report was released a day before the Knesset State Control Committee meets today to discuss controls over food prices. The ICC is launching a campaign to bring back price controls over cottage cheese and other dairy products. The ICC’s wider goal is for the government to establish a basket of basic consumer goods covering a range of categories. The basket would not only ensure that shoppers pay fair prices for basic items but that the basket would help pressure manufacturers to keep prices low on similar products.

Peleg said that an ambitious plan like that would take time, so in the meantime he wants lawmakers to take immediate steps to lower prices.

Protesting Tnuva's high prices, September 13, 2011.Credit: Gil Cohen magen

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