Minister Shamir Signs Order Cutting Cheese Prices

Published on: December 31, 2013

Agriculture Minister Yair Shamir, together with Finance Minister Yair Lapid,  signed an order yesterday placing price controls on 5 percent soft white cheese and 38% whipping cream. Following the move, the prices of the two products should go down by about 20%.

The recommended price of a 250-gram container of 5% soft white cheese to consumers is NIS 6.54. With the introduction of price controls, the price should fall to NIS 5.23. The recommended price to consumers of a 250 milliliter container of 38% whipping cream is NIS 8.23 and should fall to NIS 6.60.

At the same time, prices of dairy products under supervision, including milk in sacks and cartons, will fall by 1.1%.

The price of a one liter carton of milk will drop from NIS 6.11 to NIS 5.90. This is due to changes in production costs less a temporary price hike of 3.5% to consumers and 4% to dairies that was approved in October 2012.

Shamir said he warned Tnuva several months ago to lower prices, but they did not agree. He said his decision was intended to show Tnuva and other companies that they would be held accountable.

“The move reflects the Agriculture Ministry’s commitment to reducing the cost of living in Israel,” said Shamir. “The companies have to know that we mean business.”

Cream and white cheese are in the dairy categories that have the fewest producers.

Tnuva has a 50% share of the white cheese market and, together with Strauss Group Ltd. and Tara, holds 90% of the market. Tnuva has 70% of sales in financial terms in the 38% cream market.

The decision follows an examination of the market by an external accountant appointed by the government, which found that the profits made by Tnuva on these two products was “exceptional and unreasonable.”