Finance Minister Moshe Kahlon lost a politically charged battle Monday, when the Supreme Court ruled that the price of some dairy products should rise by 3.4%.
The court ruled in favor of Tnuva, Israel’s biggest dairy producer, after Kahlon rejected a recommendation a year ago by a joint committee of finance and agriculture ministry officials to increase the prices of price-controlled dairy products. The hike was to offset a rise in the price of raw milk.
Kahlon, who has positioned himself as a consumer-friendly finance minister, has been struggling to repeat his Kulanu party’s strong showing in the 2015 election, when it won 10 Knesset seats. The politically embarrassing price hike is unlikely before the April 9 general election.
The court didn’t set a deadline for the price hike. Tnuva said Monday it wouldn’t raise its prices before Passover, which begins 10 days after Election Day, even if Kahlon signs an order allowing the increases beforehand.
Tnuva also promised to avoid any further increases before the end of the year, even though the interministerial committee has said the year-long delay in the hike justified a sharper increase.
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Kahlon sharply criticized the court’s decision, terming it “a direct hit on the consumer and the Israeli family.” The ruling, he said, “is infected by social insensitivity and complete lack of balance between considerations of money and the public good.”
It was the second court loss for Kahlon in a month after judges ruled that he had to equalize the tax on cigarettes and rolling tobacco — and to do so immediately. The result was a sharp rise in the price of loose tobacco.