October 29, 2012

Israelis Cry Foul at Price Increases

JERUSALEM -- At the Shufersal market in Northern Tel Aviv, I overheard many shoppers complain about a sudden price surge that seemed to involve many dairy items and even such items as Heinz Ketchup. During a whirlwind visit to Israel last week, I heard a buzz about the price increases almost as much as about the upcoming elections in the US and Israel. Dairy companies like Strauss, Tnuva and Tara argue that the price increases were long overdue due to higher costs of commodities and ingredients in general. A consumer group that was part of an effective boycott a year ago has reinstated the boycott and is charging collusion by the dairy companies who raised prices by an average of six percent.

What struck me is that once the price increase went into effect, it appeared that others also got into the act. They too argued that the increases were more like “adjustments” due to what they call “higher prices for input items.” An official announcement from Tara said, "Following a rise in the prices of inputs and a rise in the price of raw milk, Tara will revise its prices upwards in the coming days by an average of four percent." Other companies went beyond the four percent. 

I engaged some of the consumers at two of the supermarkets I visited and found that the price increases will place an enormous burden on middle class families and certainly on Israel’s growing number of poor. Some were hoping that social media would again play a role in rolling back the prices. Others hoped that it would be an issue in the upcoming elections. For now, they seemed to have no choice but to dig deeper for some of the basic staples they cannot live without.