Protesters Ramp Up Facebook Protest Against Cottage Cheese Price Hike

Campaign organizer says 1,500 new signatures are being added to the boycott of the product every hour.

Public protests over the rising price of cottage cheese heightened yesterday as the leader of the Facebook campaign, Itzik Alrov, said about 1,500 new signatures were being added to the boycott of the product every hour. About 70,000 people signed the petition by last night, he told Haaretz.

Industry officials said cottage cheese sales were already dropping. An executive at a large wholesale network said sales have dropped by 30 percent in the last few days, while an official at a rival put the figure at 20 percent.

cheese - Olivier Fitoussi - June 17 2011
Olivier Fitoussi

Supermarket proprietor Rami Levi, by contrast, reported a 50 percent rise in his cottage cheese sales, attributing this to the sale he announced when the scandal broke: a small container of cheese for NIS 4.9 instead of NIS 6.5. The sale was due to end this Sunday, but with its success, his company extended it to June 23. Levi said yesterday he intends to reduce the price of Strauss-made cottage cheese to NIS 4.9 by the end of the year.

The dairy companies, led by Tnuva, have not spoken out in the media about the cottage-cheese protests, but company sources told Haaretz the firms were frantically deliberating how to react - whether to issue a statement, wait until the protests die down, launch a sale or cut prices. Or simply stand their ground on the price hike.

"Tnuva is talking about it morning till night. They're under a lot of pressure and see it as something that could threaten the company," a source close to Tnuva said. "The worst thing for them is that people are saying they're committed to their overseas owner Apax Partners, not to the Israeli public, and they don't want to be seen like that."

"Tnuva obviously doesn't know what to do, because this is the greatest crisis they've had in the past few years," a dairy executive told Haaretz. "If they cut prices, it means they'll be expected to retreat every time there's a Facebook protest. They can launch cheaper products - cottage cheese for NIS 4.5 with more water and powdered milk, like companies sometimes do abroad."

Although cottage cheese is at the center of the current struggle, the big problem is the centralized food market. The five largest food companies hold 45 percent of the market, according to Israeli company StoreNext. The five - Tnuva, Strauss, Osem, the Central Bottling Company (popularly known as Coca-Cola Israel ) and Unilever - have all increased prices between 3 percent and 10 percent on average.

"I got up this morning smeared in cottage cheese," complained businessman Mosi Wertheim, one of the owners of the Central Bottling Company, which in turn owns Tnuva's competitor Tara. "It's inconceivable that the Knesset is now considering declaring the dairy companies a concentration group. I think that once the dust settles it'll turn out to be much ado about nothing."

The dairy industry is dominated by three major players that together hold 90 percent of the market: Tnuva, Tara and Strauss. When asked if the rising price of cottage cheese was linked to a lack of competition in the dairy market, Wertheim said the competition on that market was "wild and crazy."

"The head of the Antitrust Authority already declared a few years ago that major providers are abusing their power, and it placed limitations on them," said a small producer who declined to be named. He said the market was still very centralized.

The Knesset Economic Affairs Committee will meet on Sunday to discuss resuming the monitoring of the prices of basic dairy products.