Knesset panel chair: You don't have to buy Osem this month

Outrage, boycott calls grow as food giant Osem announces price hikes

Producer of a raft of Israeli staples says prices will go up 3% to 7% starting February; price-controlled dairy products also expected to rise

Illustration photo of Osem brand pasta. (Hadas Parush/Flash90)
Illustration photo of Osem brand pasta. (Hadas Parush/Flash90)

Outrage and boycott calls mounted on Wednesday, a day after Israeli food manufacturing giant Osem announced that it would be raising the prices of its products.

In several supermarkets, activists were seen placing stickers on Osem products calling on consumers to boycott the brand, while at least two lawmakers also called for an embargo of Osem products.

“We have to take much more drastic steps to prevent the rise of prices, only the public can do that,” Alona Amram, one of the activists, told Channel 13.

Osem announced Tuesday that starting February it will raise the prices of its products by three to seven percent, owing to a rise in prices in basic ingredients.

Osem is one of the largest producers of products in Israel, and sells pantry staples including pasta, ketchup, cereals, crackers and the popular peanut snack Bamba.

As such, its price hike has a major impact on the staples of most Israeli pantries and significantly adds to the woes of Israelis already battling a sky-high cost of living.

Products from Osem on a sheld in a grocery store on December 29, 2021in Jerusalem. (Olivier Fitoussi/Flash90)

And analysts said there was a fear that many other producers would follow Osem’s lead, leading to price hikes across the economy. They also noted that local council taxes, gas and electricity prices were also due to rise in the next few weeks.

Blue and White MK Michael Biton said consumers should not purchase Osem products.

“Israelis do not have to buy Osem products this month,” said Biton, the chairman of the Knesset Economic Affairs Committee, lamenting the enormous market share of the company, and calling for the Israel Competition Authority to investigate.

Labor MK Ram Shefa, who led a similar protest against a planned Osem price hike in 2018 while a student leader,  called for a boycott, saying the public needed to be “brave enough and strong enough to buy other products.”

“Then Osem will have a real problem,” he told Channel 13.

Israelis participate a Yellow Vests protest in Tel Aviv on December 22, 2018. Hundreds of Israeli social protestors marched protesting against price hikes for water, electricity and food. (Gili Yaari/FLASH90)

In an interview with the channel, Finance Minister Avigdor Liberman appeared to give his tacit approval for such a move, saying that ultimately “the public will establish the prices,” although he clarified that he does not “support calls to boycott anybody.”

Liberman noted that Osem was a private company and tied to the international markets. It is owned by the Swiss company Nestle.

Liberman said he could not be a policeman, but promised that the government would continue its efforts to increase competition in the markets.

Liberman also addressed a request by dairy product manufacturers to raise the prices of goods that are under government price controls, like milk and soft cheeses, saying that the government would examine the request.

He noted that he had approved the import of hard cheeses from overseas, breaking a local monopoly.

Earlier this month Liberman said that bringing down the cost of living was the major challenge facing the government, which is also struggling to bring down spiraling property prices.

“There will be a battle — that won’t be easy — on the issue of the cost of living,” said the finance minister, giving the price of dairy products as an example.

“With dairy products, we have reached an absurd situation that here in Israel they are 79% more expensive than in Europe. A kilogram of yogurt costs NIS 17 in Israel and NIS 8.50 in Europe,” he said.

The government has significant plans to reform the agricultural sector to allow the import of produce, including eggs and dairy products from abroad. The move is meant to increase competition and make a wider range of products available to Israeli consumers.

Israelis buy dairy products in the Rami Levy supermarket in Jerusalem. The rise in the price of cottage cheese sparked widespread protests, June 16, 2011. (Nati Shohat/FLASH90)

In a sign of Israel’s challenges, Tel Aviv was ranked most expensive city in the world in a recent study by the Economist Intelligence Unit, the research and analysis division of the venerable periodical The Economist.

Tel Aviv climbed the rankings partly due to the strength of the shekel against the dollar, as well as increases in prices for transportation and groceries. Paris and Singapore came in joint second, followed by Zurich and Hong Kong. New York was in sixth place, with Geneva in seventh.

It’s been a decade since Israel last saw widespread social unrest over prices.

A price hike in cottage cheese, an Israeli staple, was the first spark that led to the 2011 “tent revolution” which saw young Israelis furious at sharp rises in rents and cost of living erect shelters on the upmarket Rothschild Boulevard in the heart of Tel Aviv.

Thousands of protesters soon took to the streets across Israel, shouting slogans demanding social justice.

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