search

Food giant Strauss to hike prices by up to 9%, cites raw material costs

Dairy items, spreads, snacks and honey among products to see increase; company says ‘proportional price update’ needed to maintain balance between needs of consumers and investors

Illustrative: Chocolate-covered wafer snacks produced by Strauss-Elite, April 25, 2022. (Avshalom Sassoni/Flash90)
Illustrative: Chocolate-covered wafer snacks produced by Strauss-Elite, April 25, 2022. (Avshalom Sassoni/Flash90)

Food manufacturer Strauss notified consumers Thursday that it will be raising the price on many of its products later this month, just weeks after key rival Tnuva made a similar announcement.

The price hikes will be as high as 9 percent on some items but will average at a little over 3%. The new pricing will begin on December 19.

Among the products that will be affected are dairy items, spreads, snacks, and honey.

However, the prices of its Elite Coffee, cottage cheeses, creams cheeses, and some of its chocolate items will remain unchanged.

Strauss said it needs to increase prices because of a rise in the cost of basic ingredients, principally milk, sugar, oils, and cocoa, as well as energy and packing costs, which have risen sharply over the past two years.

Consumer prices and costs for raw materials have ballooned worldwide over the past year due to a series of factors, including supply chain issues stemming from the COVID pandemic and Russia’s invasion of Ukraine. Israel has been relatively shielded until now, seeing only modest rises in  prices of food and other basic items, though larger hikes have been seen in other areas, including housing and electricity.

Strauss said its price hike was not due to a massive recall of products and the shutting down of its factories earlier this year after salmonella was found in some chocolate items. The company has since been permitted to restart production in stages after implementing hygiene changes.

Eyal Dror, CEO of Strauss Israel speaks during a press conference at Strauss main offices in Petah Tikva, April 28, 2022. (Avshalom Sassoni/Flash90)

“It is clear to us that this is not a simple move and that dealing with the cost of living affects every household in Israel,” Eyal Dror, CEO of Strauss Israel, said in a statement.

“Together with that, we believe that carrying out a proportional price update is a condition for maintaining a balance between the needs of the public, the company’s employees, its suppliers, its customers, and the many public investors.”

Among the items that will go up is a one-liter package of the Choco chocolate drink, which will increase from NIS 8.26 ($2.41) to NIS 8.65 ($2.52); cooking cream, which will go up from NIS 5.72 to NIS 5.99; and the company’s iconic “cow” chocolate bar, which will be sold for NIS 4.50, up from NIS 4.27.

Strauss’s operating profit for the last quarter was NIS 111 million ($33.32 million), Channel 12 reported, down by 63% from the same quarter in 2021.

The Standing Together organization, which lobbies for the minimum wage to be raised to NIS 40 an hour, said in a statement that Strauss and other retail chains are merely acting “to preserve their enormous profits.”

There are now concerns that another of the country’s largest food producers, Osem, will follow Strauss and Tnuva by raising its prices, Channel 13 News reported.

In mid-November, dairy giant Tnuva announced a roughly 4.7% increase on hundreds of dairy products whose prices were not government-regulated, as well as on some non-dairy substitutes. Tnuva has explained the increases as being due to the “sharp rise of [the cost of] raw milk,” which has increased by 24% since 2019 and has added NIS 400 million ($115 million) in expenses to the company.

Shufersal, Israel’s largest supermarket chain, said it would oppose the price hike by taking the affected products off its shelves, as it previously did with other large food manufacturers like Unilever and Tara, the country’s second-largest dairy processor.

But on Tuesday, Shufersal said it would consent to raise the price on certain products, ending its boycott of the brand over the rising costs after only a few weeks.

read more:
Never miss breaking news on Israel
Get notifications to stay updated
You're subscribed
image
Register for free
and continue reading
Registering also lets you comment on articles and helps us improve your experience. It takes just a few seconds.
Already registered? Enter your email to sign in.
Please use the following structure: example@domain.com
Or Continue with
By registering you agree to the terms and conditions. Once registered, you’ll receive our Daily Edition email for free.
Register to continue
Or Continue with
Log in to continue
Sign in or Register
Or Continue with
check your email
Check your email
We sent an email to you at .
It has a link that will sign you in.