The price of government-controlled dairy products is set to rise this week – and most of the dairy companies are also taking the opportunity to raise the prices on products that do not fall under government control.
Tnuva announced earlier in the day on Tuesday that its prices will rise by 4.65 percent, starting next Monday. The announcement followed a price hike of nine percent that was approved by the Finance Ministry – rather than the 16 percent price hike that was originally expected.
“The price of raw milk is a major component of the cost of producing milk products, more than 50 percent of the cost of production,” Tnuva said in a letter sent to suppliers.
“The price of raw milk as of the second quarter of this year stands at approximately NIS 43.2 per liter.” The company said the price of raw milk has increased in the past three years by at least NIS 50, adding approximately NIS 450 million to the company’s direct costs – not including the rise in the prices of electricity, fuel, water, property tax, and packaging materials.
The Tara dairy company, Strauss Foods and even the smaller Gad dairy company all announced price hikes as well in the wake of the announcement by Tnuva.
Tara said it would raise its prices by 8.28 percent. Strauss announced a 2.33 percent increase. Gad Dairy said it would raise its prices by five percent.
“The price we are currently charging covers only a small part of the total price incurred by the company, including due to the increase in the price of raw milk,” Strauss explained in a statement.
In response, Likud MK David Bitan, head of the Knesset Economic Committee said he was not surprised by the price hikes.
“It was expected that with the increase in the prices of government-controlled milk, the price of the non-controlled products would also increase,” he said. “The recommendation of the Economic Committee should have been accepted [by the government] to prevent the increase in the price of milk. This is an additional and illegitimate burden on the public.”
Bitan added that he plans to convene a follow-up discussion on the issue in the Economic Committee, with the participation of the director-general of the Prime Minister’s Office (PMO), and the deputy head of the Budget Division.
At least 30 percent of Israel’s total dairy products are expected to be included in the price hikes planned for next week. All the price hikes are expected to take effect by May 10.