Ministry: No Deal on Price-controlled Bread

The shortage of price-controlled breads will continue, after the Ministry of Industry, Trade and Labor rejected a compromise under which the bakeries would produce one of the five breads in question - sliced dark bread - for two weeks.

The major bakeries, which produce 85 percent of price-controlled breads, are therefore continuing their strike, called after Industry and Trade Minister Eli Yishai refused to allow them to raise prices by 12.5 percent, to compensate for a 35 percent increase in the price of flour. Small bakeries, however, are baking these breads.

The compromise proposal had stemmed from Yishai's assessment that the government would approve within two weeks a mechanism for compensating poor families for the price hike. But the bakeries wanted a pledge that they be allowed to raise prices afterward even if no such mechanism were approved. The ministry refused, claiming that its legal advisors nixed the deal because it had no right to approve a solution that did not cover all price-controlled breads.

The Knesset Economics Committee discussed the issue yesterday, and backed the idea of compensating the poor for the price hike. It demanded that the same be done for price increases in other basic products.

The price-controlled breads are whole and sliced dark bread, whole and sliced white bread and plain challah. Other, more expensive breads are being baked as usual.