'People Won't Pay More Than NIS 5 for Cottage Cheese'

Retailers report normal levels of sales thanks to discount deals on cottage cheese.

The cottage cheese boycott and the supermarket price cuts that followed have produced a mixed shopping bag of results for the retail chains. Super-Sol says its sales of the white curd rose by up to 15% after it launched its two-for-NIS-10 deal. Rami Levi, of the eponymous chain of discount supermarkets, Rami Levi Shivuk Hashikma, said sales yesterday were up by 38% from an average pre-protest day. "The figures show that if the manufacturers cut their prices, more people could afford to buy their products," Levi said.

Anyone making the rounds of supermarkets these days could make the mistake of thinking that Israel's "big three" dairy manufacturers had cut the prices for cottage cheese. Discounts by the supermarket chains in the past two weeks have caused customers to get accustomed to paying an average of NIS 5 per 250-gram tub of the curds.

Cottage cheese - June 29 2011

The first to make the plunge was Levi. As soon as the Facebook consumer boycott was announced, about two weeks ago, he slashed the price of Tnuva's cottage cheese from around NIS 7.5 to NIS 4.9 per container. A few days later, he announced he was reducing rival brand Strauss to NIS 4.9 through the end of the year. His chain now sells the cottage cheese of Tnuva, the veteran market leader, and of number three dairy Tara, for NIS 5.49, a price he says will remain in effect "until further notice."

Rival discounter Kimat Hinam followed Levi's initial announcement before the day was out, with cottage cheese for NIS 4.9 and one-liter cartons of milk for NIS 3.9. The sale's ending date was extended from June 30 until July 10.

Super-Sol stepped in next, albeit half-heartedly, offering two tubs for NIS 10 and only at its discount chain Super-Sol Deal, urban chain Super-Sol Sheli and Yesh, which targets the Haredi market. Environmental Protection Minister Gilad Erdan criticized the deal, saying it encouraged conspicuous consumption. Super-Sol extended the four-day sale until further notice or until either the cabinet or the dairy manufacturers do something to bring down prices.

"Customers today are simply unwilling to pay more than NIS 5 for a tub of cottage cheese," a Super-Sol executive said yesterday.

Other grocery chains have jumped on the bandwagon. ABA Victory, which has about a dozen stores in southern and central Israel, is offering cottage cheese and "white cheese" - a soft, unripened spreadable cheese - from all the big dairies for NIS 4.98 a tub. "For now, we plan to continue the sale to the end of the month, and after that time will tell," said ABA Victory owner Eyal Ravid.

Blue Square, whose various niche chains now bear the Mega brand, got into the game about a week after the boycott was called. Its first step was to fire off a letter to the Big Three, announcing an immediate cut to NIS 5.49 of the retail price for cottage cheese and white cheese until further notice, and asking the suppliers to reduce their wholesale prices accordingly. The request was backed up with a threat to reconsider the company's arrangements with the suppliers.

Co-Op Israel, which operates the Mister Zol and Maman chains, announced this week it would not charge VAT (16% ) on any of its dairy products, through Thursday. Only members of the chains' loyalty clubs are eligible, however, and customers must spend NIS 50 or NIS 100 (at Mister Zol and Maman, respectively ) before stocking up on the white stuff.

Eden Teva market is selling all three cottage cheese brands for NIS 5.49 per tub, "until [wholesale] prices drop," CEO Guy Provisor says.

The 24-hour chain AM:PM charges NIS 12 for two tubs of Tara cottage cheese and around NIS 7.5 per tub for the Tnuva and Strauss products.

The Tiv Taam chain, on the other hand, is still charging NIS 7.8 for cottage cheese.