Yogurt and Diapers Cost More Here

Agriculture Ministry: lack of grazing land for cows leads to higher production costs.

Yogurt costs 34% more in Israel than in the United States, Britain and Australia, according to a survey by the Public Trust (Imun Hatzibur ) consumer organization in conjunction with Nielsen.

yogurt - July 6 2011

The poll shows that Yoplait yogurt, which is manufactured by Tnuva is Israel, is 24% more expensive here, on average. Butter prices are 20% higher in Israel, even though they are supervised by the state.

The survey examined the same brands and same-sized containers in Israel and the United States, Britain and Australia. Prices were adjusted for purchasing power parity.

Strauss' Danone Activia yogurt is 36% more expensive on average, but the price range is wide: Activia in Israel is 31% more expensive than in Australia and 133% pricier than in Britain, but actually 11% cheaper than in America.

Tnuva's butter is 29% more expensive than the cheapest British butter and 36% more expensive than in Australia. U.S. butter prices are slightly higher.

Müller yogurts, produced here by Tara, are 40% more expensive in Israel than in Britain.

"Raw milk prices, the main raw material in the product, are more expensive [in Israel] than raw milk abroad," Strauss said. "In addition, VAT on dairy products in the countries examined is significantly lower than VAT in Israel."

Tnuva added, "Raw milk prices in Israel are 30% to 40% higher than world milk prices."

Tara said the product comparison is irrelevant as the products consumed abroad are not sold in Israel. The company also said it was running sales on the purchase of four or seven containers of Müller yogurt, which made the price much cheaper. In addition, there is no VAT in Britain on dairy products and raw milk is cheaper.

The Agriculture Ministry said: "Production costs in Israel are significantly higher than production costs in most countries. The reason is high prices for inputs, partially as a result of the lack of grazing land for cows, which requires the importing of most of the feed for cows and increases production costs. Butter is unprofitable today and is underpriced so that consumers will not have to bear the burden of the full price increases."

Turkish diapers to the rescue?

In an effort to lower prices, Blue Square means to start importing Huggies diapers and stop buying from the local manufacturer, Hogla-Kimberly.

The company, which runs the Mega chain of supermarkets, will buy its Huggies directly from the Kimberly-Clark factory in Turkey. That should lower diaper prices for consumers by about 25%, Blue Square says.

Diapers cost about NIS 1.25 each, said Blue Square CEO Zeev Vurembrand: NIS 60 for a package of 60 diapers, not on sale. The imported diapers will cost about 92 agorot per diaper, or NIS 50 for 54 diapers, he he added.

Vurembrand also promised sales and special deals on the imported diapers.

A number of retail chains have urged Hogla Kimberly to lower prices or offer special sales.

Hogla Kimberly said the Turkish diapers are of inferior quality compared with locally made ones. The Turkish products are less absorbent and are made of inferior materials, it said. Mega says the imported diapers are the same quality as those sold in Europe and meet Israeli standards.