Israel’s supermarket giants agreed on Friday they would freeze an expected price hike on bread, following a request by Economy Minister Orna Barbivai for a reprieve.
Bread products with supervised, or limited, prices include sliced and unsliced white and dark loaves, as well as challah. The expected 20% price rise, which would have increased the cost of the common dark loaf bread from NIS 7.11 (approximately $2) to NIS 8.54 ($2.45), was set to go into effect on Sunday.
The Rami Levy, Shufersal, Victory, and Yochananof supermarket chains announced they would shield consumers from the jump, which the Prime Minister’s Office said would last for the coming two weeks.
The announcement came after overnight consultations on the matter held by Prime Minister Yair Lapid, and the PMO said the premier would hold an “urgent” meeting on the price hike with relevant parties on Sunday.
“The prime minister ordered for an investigation into all possibilities, beginning with expanding controls on bread, to the indemnification of bakeries in order to curb the increase in the price of bread,” a separate statement said, adding that Lapid was looking into the possibility of expediting legislation to stop the increases.
According to the PMO, the rise in bread price is a result of a global food crisis linked to Russia’s invasion of Ukraine, which is a major exporter of wheat.
Barbivai also spoke to representatives of Israel’s largest bakeries in order to find a solution to the price hikes, according to the PMO.
Rami Levy said in a statement on Facebook on Thursday they had “decided to absorb the controlled price of bread” to support struggling families, while Victory CEO Eyal Ravid said his company would not participate in the price rise of products that “sometimes are the only thing that can be put on the table of low-income families.”
According to the latest figures released by the Central Bureau of Statistics, Israel’s annual inflation rate stands at 4.4% as of June, the highest since 2008.
The CPI measures the average cost of household goods. Particular rises in June were seen in transport (2.4%), housing (0.7%), and culture and entertainment (0.7%).
However, a decrease of 8.5% was seen in the costs of fresh vegetables and fruits, and 3.4% in clothing and footwear during June, the data showed.
Meanwhile, the Israel Electric Corporation said Monday that electricity prices will rise by nearly 10% next month.
The authority blamed the price hike on the global energy crisis, which began in 2021, and has been exacerbated by the war in Ukraine. It includes a dramatic rise in the cost of hydrocarbons needed for power plants, despite the fact that Israel now extracts its own natural gas for export.
The 9.6% price rise, set to go into effect as of August 1, must still win final approval, expected sometime in the next two weeks.
If approved, the increase is expected to also affect the price of water, as Israel’s national water company Mekorot relies heavily on power provided by the Electric Corporation.
Outrage over the rising cost of living has been growing, a decade after Israel last saw widespread social unrest on the matter.