Israeli Candy Makers Raise Prices Despite Cheaper Imports, Study Shows

Strauss, a major player in the local candy game, has been at the eye of the storm as protesters say its products are cheaper in overseas markets.

Israeli manufacturers have been raising the prices of their chocolate bars since 2009, even as imported candy has became cheaper.

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Strauss, the center of a growing consumer protest sparked by the price of its Pesek Zman candy bars, one of its leading products, raised the prices on most of its chocolates since 2009, TheMarker found based on data from the market research company StoreNext.

Pesek Zman sold for an average of NIS 4.68 in 2009 and NIS 5.08 last year. This made Pesek Zman one of Israel’s most expensive candy bars last year, second only to Leiman Schlussel’s Kinder Bueno.

Yet Pesek Zman was still the country’s best-selling candy bar in 2011, with 18% of the market. Sales increased 31% over 2010.

The current protest was prompted by reports that Pesek Zman bars are now selling in New Jersey for the equivalent of NIS 2.70.

Kinder Bueno was the No. 2 candy bar in the country last year, with 12.3% of the market, despite being the most expensive.

Other local manufacturers raised prices as well since 2009. Leiman Schlussel’s Loacker bars, for instance, went up from NIS 3.40 to NIS 3.67 in that period.

Meanwhile, imported candies such as Snickers, Twix and Mars became significantly cheaper. Snickers was the third most popular candy bar in 2011, with 7% of the market.
Strauss holds 50.76% of the market for individual candy bars, which makes it a monopoly by the legal definition. That market was worth NIS 158.2 million last year in the country.

Strauss had claimed that ShopRite, the supermarket in New Jersey found to be selling Pesek Zman bars for $0.69 plus tax, was selling the candies at that price only because it was trying to dump surplus supply. The usual price was higher, Strauss argued.

That claim appears to be false, however.

Yoav Rokach Penn, the person who originally documented the price of Pesek Zman at ShopRite, produced more receipts from another New Jersey store showing that Strauss’ candies were significantly cheaper there than in Israel as well.

The store, Amira, was also selling Pesek Zman for $0.69, and was not running a sale.

The owner said he bought the goods from a U.S. company that had purchased them from a supplier in Israel, and that these were the regular prices. He’s still turning a profit, he noted.

Facebook users are calling on Israelis to boycott Strauss.
Strauss said everything is more expensive in Israel, including electricity, taxes and transportation, and that retailers set the price of its products. It sells them Pesek Zman bars for NIS 3.50 each, the company said.

It refused to say how much it charged supermarkets abroad.