In response to the threat of a consumer boycott, food company Strauss Group Ltd. (TASE:STRS) today announced that it will extend the Jewish New Year holiday discounts until the end of December, essentially accepting a temporary reduction in prices in exchange for consumer quiet.
The move comes after the company announced permanent price cuts on some products on Sunday, after Tnuva Food Industries Ltd. announced a similar measure.
"After a good meeting with protest representatives, we sought for a way to further contribute to the price reductions effort, on top of the price reductions already made by Strauss," said Strauss Israel president and CEO Zion Balas in a statement. "We decided to maintain the current low price levels of the holiday discounts through the end of the year."
Strauss's discounts include 2-for-1 sales of white cheese and cottage cheese at NIS 10 a two-pack container.
Strauss added, "We have not ended out commitments to consumers. We will continue to work on this in the coming months and years, and we will turn over every stone at the company to find possible solutions to help consumers and adapt ourselves to the reality that has been created. This process requires changes, adjustments in work procedures, and long-term investments that cannot be implemented immediately."
Strauss concluded, "It is important to emphasize that in order to achieve substantial reductions in consumer prices, all the parties in the chain must act. The government should contribute by lowering VAT on food products and the other parties should participate in this effort."
Yesterday, the cottage cheese boycott leaders and the Tel Aviv University Student Union announced that they would give Strauss, Osem Investments Ltd. (TASE: OSEM), and Unilever Israel until after the Sukkot holiday on October 20 to cut prices on a permanent basis.
Published by Globes [online], Israel business news - www.globes-online.com - on October 5, 2011
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