Panel to PM: Apply Antitrust Law to Dairies

Subcommittee issues list of measures aimed at lowering prices of dairy products and increasing competition in industry.

The subcommittee for reviewing the country's dairy industry submitted its recommendations to Prime Minister Benjamin Netanyahu Sunday.

"There are lots of distortions in the dairy industry that need to be fixed. I'm targeting three of them: competition, competition and competition," Netanyahu said Sunday.

cheese - Olivier Fitoussi - June 17 2011
Olivier Fitoussi

The subcommittee indeed recommended a list of steps intended to open the dairy market to competition and to introduce imports. Dairies and supermarket chains would be forbidden from being the importers themselves, however.

In addition, the subcommittee recommended rescinding the dairy, poultry and produce farmers' exemption from antitrust laws, in order to do away with coordinated prices. It also called for strengthening smaller producers.

If the reforms pass, dairy farmers who produce more than the state-set quota for milk would sell their surplus at a negotiated price - as opposed to the government-set price that the dairies pay for milk. The negotiated price is expected to be less than the government-set price, and ultimately 10% of milk will be sold at market prices.

The government-set price should be reduced as well, the panel suggested.

The subcommittee also called for increasing quotas for small dairy farms, as opposed to large kibbutz institutions, and for a review of whether supermarket chains were excluding products from smaller dairies.

However, other recommendations called for reinforcing larger, kibbutz dairy enterprises - such as the one allowing farmers to buy each other out starting in 2014.

The subcommittee also called for limiting profits on basic foodstuffs.

Thousands of dairy farmers protested outside the Prime Minister's Office yesterday over the plans to cut the government-set price for milk. The farmers are considering stopping selling milk to the dairies as a warning.