Tnuva announces price hikes on majority of unregulated dairy products

Expected increase of about 5% to apply to most of the food giant’s dairy products and non-dairy substitutes; Shufersal chain says it opposes move, will take items off shelves

Tobias (Toby) Siegal is a breaking news editor and contributor to The Times of Israel.

Illustrative: A man looks at dairy products while shopping at a Rami Levy supermarket. (Nati Shohat/Flash90)
Illustrative: A man looks at dairy products while shopping at a Rami Levy supermarket. (Nati Shohat/Flash90)

Major Israeli food manufacturer Tnuva announced on Monday that it would be hiking the prices on hundreds of its products, a move that a major supermarket chain immediately announced it would not comply with.

The planned hike will come into effect next Wednesday, November 22, and is expected to impact nearly all of the company’s dairy products that have prices that are not government-regulated.

These could include dairy products such as many kinds of cheese, butter and milk products, as well as some non-dairy substitutes like soy- and oat-based beverages and tofu.

Overall, the prices of the affected products are expected to rise by around 4.7 percent.

Some exceptions to the price rise include unregulated basic food items such as certain yogurts, lactose-free milk and cottage cheese — which was at the epicenter of the 2011 Israeli consumer boycott over the rising cost of living.

In a statement issued by Tnuva, the company explained the increases as being due to the “sharp rise of [the cost of] raw milk” which has increased by 24 percent since 2019 and has added NIS 400 million in expenses to the company.

Tnuva cottage cheese in a Jerusalem supermarket. A 2011 price hike on the foodstuff sparked a popular protest over the cost of living in Israel (photo credit: Nati Shohat/Flash90)
An undated picture of Tnuva cottage cheese in a Jerusalem supermarket. (Nati Shohat/Flash90)

The company added that it had not raised the prices of unregulated products since 2018.

However, it is worth noting that Tnuva didn’t lower the price of its dairy products, even when the price of raw milk dropped, such as in 2014.

According to the Calcalist financial website, Tnuva’s expected net profit for 2022 will be around NIS 300 million (approximately $87 million), a decrease of more than 30% compared to 2021.

Tnuva’s announcement comes as the company is still dealing with public backlash over several incidents of animal parts being found in its frozen vegetable products in recent months.

Responding to Tnuva’s announcement, Israel’s largest supermarket chain Shufersal said it would oppose the planned price hike by taking those products off its shelves.

“We don’t approve Tnuva’s new price list, in the same way that we haven’t approved similar attempts by other providers,” Shufersal said in a statement.

Shufersal has previously boycotted dairy products manufactured by other major producers like Tara, the second largest dairy processor after Tnuva, and Gad Dairies, both of which announced price hikes a few months ago.

Other manufacturers and importers have faced consumer boycotts for raising prices.

Food manufacturer giant Strauss Group has not announced plans to increase the prices of its dairy products as of yet.

Illustrative: People outside a Shufersal supermarket in Safed on April 6, 2020. (David Cohen/Flash90)

In August, the Israeli Dairy Board approved raising the price of price-regulated dairy products like milk, cheese and butter by 4.95%.

According to a survey published last week by the Israel Democracy Institute, 44% of Israeli respondents said the rising cost of living was a main factor influencing their decision on whom to vote for.

Likud leader Benjamin Netanyahu, whose political bloc won a large majority in the November 1 election, has focused much of his election campaign on the rising cost of living.

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