Yishai Flip-flops, Keeps Price Control on Bread

Industry and Trade Minister Eli Yishai said yesterday he does not plan to sign an order removing bread from the price-control regime that has kept costs for the public low. The move represents a reversal of his position.

Two weeks ago, the cabinet agreed to support Yishai's proposal to remove bread from the current price-control regime, and to authorize compensation for poorer people. Some NIS 60 million was approved as compensation, and the decision called for an index that would grant stipends to counter the rising cost of food.

Yishai said his change of heart came after he realized that changing the current regime would substantially increase bread prices.

He now plans to present the cabinet with a proposal to overturn the decision to lift price controls. But he still intends to hold talks with the treasury, offering compensation to the poor, in line with the earlier cabinet decision.

Some observers said Yishai had believed that he would eventually be forced to remove price controls and allow bakeries to charge more realistic prices that reflect the rising cost of imported flour.

In any case, Yishai's change of heart was not well received at the Prime Minister's Bureau. But they said they had not yet heard from the minister officially on the matter.

Finance Minister Roni Bar-On, who was Yishai's partner in lifting the controls on bread prices, said he was surprised. Speaking at a meeting with business leaders, Bar-On said that "I have already paid the compensation. I will meet with Yishai and hear how something that was agreed less than a month ago, and for which we have already paid, can be suddenly overturned."

Yishai's office issued a statement that blamed the bakery owners of planning to increase bread prices significantly and said that "Minister Yishai decided to cancel his decision in order to protect the consumers."

In recent months, bakery owners demanded the right to raise prices for ordinary bread by as much as 70 percent, which they said was necessary to cover their added costs because of the rapid increase in the pric e of flour worldwide.