Discount Blitz Not Luring Buyers to Cottage Cheese

Industry: Importing dairy is against the law

Consumers are snubbing the siren song of special deals and continuing to forgo cottage cheese, retailers report.

A week after the consumer rebellion erupted, sales of the curds refuse to rally. Blue Square, which runs the Mega chain of supermarket stores, reported yesterday that sales of cottage cheese are down about 35% from the norm.

cheese - Olivier Fitoussi - June 17 2011
Olivier Fitoussi

Aba Victory tried to woo shoppers with a special deal on cottage cheese, and on white cheese as well, but it didn't work. "Sales of cottage cheese are down 10%, even though we're selling it for NIS 4.90 a tub," said Eyal Ravid, the chain's owner.

Rami Levi was the first chain to react: It cut the price of cottage cheese to NIS 4.90 shortly after the consumer rebellion began. During the first week of the grass-roots boycott, sales at the Rami Levi chain increased by 50% compared to normal times, a rise the owner - the eponymous Rami Levi - ascribed to the deal. This week, sales remain above normal, but less so than last week, he said. Apparently, people stocked up on cheap cheese, he surmised.

The rebellion began on a Facebook page launched by concerned citizen Itzik Alrov, who urged people to boycott the cheese because its price has increased disproportionately. As of press time, some 100,000 people had "friended" the page - but Alrov says the boycott's support base is far bigger. Not everybody goes to Facebook, he pointed out: Some read about it in the papers and respond.

This week, Alrov's Facebook page called for expanding the boycott to white cheese. But retailers report that sales of that product have not changed.

Even so, some are taking preventive measures. At Aba Victory, for instance, Ravid is selling white cheese for NIS 4.90 per tub. He said he expected sales to take off, but they didn't. Sales of white cheese rose just 7%, he said.

Alrov said yesterday that if the dairy companies don't publicly admit their mistake and lower prices within the next few days, the boycott could escalate. "All sorts of statements like 'maybe we were wrong, but we haven't decided what to do about it yet' are unacceptable," he said.

Not practical to import, not to mention illegal?

Importing dairy products to drive down local prices, as some suggest, is impractical because of their short shelf life, Shaike Drori, director of the Israel Dairy Board, told a dairy conference in Jerusalem yesterday. Only hard cheeses and milk powder are feasible to import, he said; cottage cheese, for instance, is not.

Importing dairy products would depress local production and thus increase local prices even more, he predicted at the conference, which attracted 2,000 people.

A law passed three months ago requires milk and dairy staples to be produced in Israel, noted the CEO of the Israel Cattle Breeder's Association, Yaakov Bachar. Prime Minister Benjamin Netanyahu's announced intention of allowing dairy imports is thus mere populism, Bachar said: It would break the law.

Importing dairy products from Europe would merely subsidize European dairy producers, Bachar charged. "The Europeans understand the importance of an independent dairy industry in their countries," he added. "In Israel, the price of raw milk is based on expenses that are not subsidized at all."

Figures presented at the conference indicate that raw milk in Europe is subsidized by 20% on average.

Since cottage cheese can't be imported, its price is fated to rise further, said Avshalom Vilan, head of the Israel Farmers' Federation. The retailers' share of the price paid by the consumer has increased 8% since price controls on cottage cheese were removed, while the manufacturers' share has declined by 5%, he added.

He rebutted comments by Strauss Group chairwoman Ofra Strauss, who blamed forces stronger than herself. "I would tell her, the hand that takes is the hand that gives back," he said.

The Kibbutz Movement will convene an emergency meeting in Ramat Efal on Thursday to discuss the prospect of the government exposing dairy products to imports. This would ruin the local dairy industry, movement secretary Ze'ev Shor said, and hurt thousands of families that make a living producing milk or servicing the dairy industry.

"I would expect the prime minister to bolster the producers rather than weakening them," he added. "His assault on them does an injustice to thousands of families that have led Israel's dairy industry to international heights."

Shor said the milk producers are not responsible for the increase in the price of dairy products, and the Kibbutz Movement would forcefully oppose any populist government action that would cause them harm.