On Tuesday, the expected price hike from Tnuva on most dairy products came into effect, with the exception of the prices that the government has set.
Now, all eyes were turned towards Shufersal to determine if the supermarket chain would follow through on its threat of boycotting Tnuva’s products and risk losing clients.
The price hike
The prominent manufacturer had announced the price hike of almost 4.7% last week, which is applicable to hundreds of dairy products that do not have their prices regulated by the government.
The products that are affected by the price hike include numerous milk products, butter, most types of hard cheese, along with some non-dairy substitutes like tofu and oat-and-soy-based beverages.
There are some exceptions, which include cottage cheese, lactose-free milk and certain yogurts. It is likely that the change will not become obvious to the average consumer until next week.
This is due to the fact that most of the retail chains will have some of the old stock and they will replace the supermarket shelves with the newly priced products.
The biggest supermarket chain in Israel, Shufersal, had stated that it would take off the affected products from its shelves to oppose the increase in prices.
This is something that it had also done with other large manufacturers, including Tara and Unilever, the former being the second-largest dairy processor in Israel.
Apart from Shufersal, the only other food retail chain that has rejected the new price list from Tnuva is Yochananof.
On Tuesday, the Tnuva products that were delivered to Shufersal only comprised of products that have their prices regulated by the government and those not affected by the price hike.
However, it is possible that the company could end up opposing the price hikes on its own because consumers do not have a lot of alternatives and smaller retails can offer some competition.
Similar to other retail chains in the country, most of the dairy products that Shufersal gets is from Tnuva, a dependency created due to the supermarket chain’s other boycotts.
Moreover, Ramat Hagolan Dairies, the company’s own dairy manufacturer, also ceased production recently because of financial problems.
According to Tnuva, it had to implement the price hike because there has been a 24% increase in the cost of raw milk since 2019.
This has increased the company’s expenses by NIS 400 million. Strauss Group, the food manufacturer giant, has not made any announcement about increases in prices of its dairy products.
However, it has limited ability of covering the shortages. The financial statements of Shufersal also make it clear that the supermarket chain depends on Tnuva for dairy products.
Meanwhile, the updated price list has already been accepted by some of the smaller retailers and they will begin selling Tnuva’s newly priced products in the next few days.
Other food producers and retailers are keeping an eye on Shufersal to see if its boycott is going to succeed or not, as consumers will make the decision.