Tnuva, Israel’s largest dairy products company, has announced rises in the wholesale prices of its products averaging 4.7%. The rises, which apply to products not subject to government price controls, will come into effect on November 22.
According to the company, the rises are moderate, given the significant rises in input prices, headed by the price of raw milk, which has risen by 24% since 2019. Nevertheless, the company has decided not to raise the prices of certain products, among them all its Bio yoghurt products, cottage cheese, reduced lactose and lactose-free milk, three-liter tubs of Tnuva 4% fat yoghurt, and one liter cartons of Alternative soy drink. Tnuva also points out that consumer prices are set by the retailers, without the company’s intervention.
Tnuva also states that it has not raised non-controlled product prices since 2018, even through the price of raw milk has risen by NIS 0.49 per liter since 2019, adding NIS 400 million annually to its direct costs. In addition, in the past two years, prices of many inputs have risen in Israel and globally: energy, water, municipal rates, commodity prices such as soy beans, up 46%, and oats, up 43%, packaging materials, and so on.
The price of raw milk, which accounts for about 50% of Tnuva’s production costs, is set once a quarter by the state. On October 1, it was set at a peak price of NIS 2.465 per liter. Because of the rise in the price of raw milk and in other inputs, the joint committee of the Ministry of Finance and the Ministry of Agriculture recommended a 6.49% increase in the prices of supervised dairy products in March 2022, although in the agreement with the dairy industry signed in June, prices rose by 4.9% only.
Tnuva has apparently anticipated the reaction of consumers and retail chains, which in the past two weeks have been campaigning against price hikes by the major suppliers, headed by Unilever, and it points out in its announcement that not all of its product swill become dearer.
Shufersal, Israel’s largest supermarket chain, which has been spearheading the campaign against price rises, says that it will not accept rises by one of the countries largest suppliers. Shufersal has stopped selling products of rival dairy firm Tara, owned by the Central Bottling Company. Two weeks ago, Shufersal put up signs at its branches stating that some products would be missing from its shelves.
Published by Globes, Israel business news - en.globes.co.il - on November 14, 2022.
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