For the first time since the cottage cheese broke out, the government has taken a practical step and has intervened in prices for dairy products. Ministry of Agriculture Supervisor of Prices Uri Tzuk-Bar has decided to impose price controls on 5% fat white cheese and 38% fat double cream.
The decision comes after an external auditor found that Tnuva Food Industries Ltd.'s profits on these two items were "extraordinary and unreasonable."
Tzuk-Bar's decision will come into effect, subject to a public hearing, when Minister of Agriculture Yair Shamir and Minister of Finance Yair Lapid sign it.
The Ministry of Agriculture estimates that imposing price controls on the two products will lower their price by 20%.
The profitability study found that white cheese and double cream were categories with the highest market concentration. Tnuva controls half the market for white cheese in financial terms, and Tnuva, Strauss Group Ltd. (TASE:STRS) and Tara Dairy together control 90% of the market.
Tnuva has a 70% share of the double cream market in financial terms.
Published by Globes [online], Israel business news - www.globes-online.com - on August 26, 2013
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