Small Food Producers Blame High Prices on Label-lusting Buyers

Small food manufacturers supplied their own explanation for the high prices in Israeli supermarkets. "There's a good chance the price frenzy began with manufacturers understanding that they have to run sales all the time for consumers," Liora Birnhack-Markus, co-owner and co-CEO of Manamim Food Industries said yesterday.

"The consumer doesn't check prices and doesn't buy house brands, he likes name brands. If you put a lower-priced product on the shelf, he won't buy it, but if you sell it as an expensive product - on a buy one, get one free sale - then he will," said Birnhack-Markus.

"Our prices are lower than Elite's on wafer cookies, and the store brand we make for the chains are even lower, even though there is no difference in taste or ingredients. But the fact is that people buy the more expensive one."

She said the outcry against the giant food corporations hurt the small manufacturers, who get tarred with the same brush by consumers. "Today we are not turning a profit," Birnhack-Markus said. "Cocoa prices rose by hundreds of percent in the past year, and I had to hike prices 5% just to stay even. When I'll need to raise prices at the supermarket chains, tomorrow morning, they won't let me because of all that's happened, and I actually deserve the price hike," she said.

"There is undoubtedly concentration in the food industry," said Gilad Zilberberg, chairman of the Manufacturers Association of Israel's small and medium-sized factories committee. "I think the best solution is for the retail chains to go back to supporting the small suppliers and producers, giving them more shelf space, and giving customers a greater possibility to consume the products of small and medium producers, whose quality is equal to those of the leading brands."