Gas Prices Spur Further Hikes in Most Consumer Prodcuts

Most manufacturers say they are forced to follow suit

If you thought the recent big wave of price hikes was behind us, then you are in for a surprise: Consumer product companies have started warning that if gas prices continue to climb, they will have to raise their prices as well.

Gasoline prices rose 23 agorot per liter Saturday night, a 3.13% increase. Since the begining of 2011, those prices have climbed 13.6% - 90 agorot per liter for 95-octane gas.

Danny Scharf
Tomer Appelbaum

"Fuel prices have a great influence on the detergent and toiletry sector," said Dan Scharf, the CEO of Henkel Sod, which includes such brands as Persil, Sod and Hawaii. "It also affects the prices of plastic packaging for the products since [fuel] is one of the components, as well as being one of the raw materials in certain products," he added. Scharf said the price of gas also affects the price of raw materials and the end products as well, since they all need to be transported.

Expenses for oil-based products and fuel make up 3% to 7% of a product, said Scharf - and competition in the detergent market does not allow firms to raise prices to offset the higher costs.

"In February we raised prices by 2% to 3% and I still don't know if we will raise prices again," he noted. But if gas prices continue to rise, Henkel Sod will be forced to do so, Scharf added.

Henkel Sod is of course not the only company that has raised prices in the detergent and toiletries sector. Proctor & Gamble announced a price hike of a few percent in some of its products, such as laundry products and its Pantene shampoo.

Starkist tuna is also raising its prices by 5% to 10% in mid-May, the company announced recently. Fish prices are climbing and fishermen's salaries in the Far East have not changed; the main expense for fishermen is actually the cost of fuel for their boats and for transporting the fish, said Starkist. The company is also not optimistic about the future: If fuel prices continue to rise, it will have to raise its prices even higher.

Other companies that announced price hikes in the past week included Tnuva, with a 5% to 7% increase for all its dairy products - although in the end many of its subsidiaries are apparently only raising prices by 3% to 5%.

The Strauss Group is also upping it prices; last week it informed the supermarket chains it would do so as of June 1. Cake prices will go up 5%, coffee by 13.5%, salads by 3.3% to 8.3%, and its Yotvata dairy products will be 5% to 7% more expensive.

Unilever is also raising prices in June by 4% to 12%.