Osem Asks Permission to Coordinate Price Cut

Unilever bows to pressure, cutting prices on 22 items.

The effects of the consumer protest apparently are still spreading: Osem wants an exemption from antitrust restrictions on price coordinating - in order to cut prices in tandem with other manufacturers.

On Monday, Osem CEO Aviezer Kaplan asked Antitrust Commissioner David Gilo for permission to work with other producers in order cut prices by up to 15% on several leading products.

This comes after protesters called on Osem, Telma and Strauss to cut prices across the board. The protesters, who made their call just before Yom Kippur this weekend, gave the firms until after the Sukkot holiday to comply, under threat of boycott. They want various food items to cost 30% less. Producers and supermarkets would split the burden.

Israel's antitrust law bars competitors from coordinating pricing and profits. The Antitrust Authority plans to state that this means the food manufacturers' executives cannot indirectly coordinate prices through media interviews or public lectures.

Unilever, which controls Telma, announced yesterday that it would lower prices after conducting a "thorough investigation" of the market, including the recent protests and its contacts with college students spearheading boycott campaigns. The company said it would also extend holiday sales on cereals through the end of the year.

It will be reducing prices by up to 10% on 22 leading products, including Blue Band margarine, Telma mayonnaise and mustard, and 778 brand jams.

While several retailers have bowed to consumer pressure so far, Unilever is the first manufacturer to lower prices on non-dairy products in response to the protests.

The CEO of Unilever Israel, Angelo Trocchia, said he expected retailers to lower the final prices of his company's products accordingly.

Osem said it is rethinking its pricing structure for Materna baby formula, and would announce changes after Sukkot. At that time, it is expected to increase package size by 30% for several products.

Although Strauss said that it would keep running its sales on dairy products, the protesters have called for making these prices permanent, and for slashing prices of non-dairy products as well.

Ori Reshtik, chairman of the Tel Aviv University student union, said in response to Unilever's announcement: "Although undoubtedly there is still a long way to go, consumers made another achievement today, on top of other companies' price cuts."

Reshtik said Israeli families were paying less for their groceries over the past few weeks, "impressively so." He said activists would be taking more steps to push other companies to lower prices.