Israeli foodmaker Strauss to raise prices as costs soar
JERUSALEM — Israeli foodmaker Strauss Group will raise prices by an average of 2.9% later this month, it said on Thursday, citing a spike in raw materials and other costs.
The country’s largest food producer Tnuva, owned by China’s Bright Food and Dairy Co, has already raised prices on mostly dairy products by an average of 4.7%.
Nearly half of those polled in the run up to Israel’s Nov. 1 general election cited the cost of living as the most important issue.
The country’s largest supermarket chain Shufersal, which has significant market clout, rejected Tnuva’s November price hike, and also those by smaller dairy rival Tara and Unilever’s Israel unit, leading to their products being taken off its shelves.
Shufersal did not immediately comment following Strauss’ announcement on Thursday.
Strauss pointed to a 30% rise in milk prices over the last two years, higher electricity rates, steep gains in sugar and cocoa and a jump in packaging material costs, putting the impact on the company at around 300 million shekels ($87 million).
It called the rises that will affect some dairy products and salty snacks and sweets from Dec. 19 “a moderate update” after 12 years of holding the line on prices.
Strauss said it was not raising the price of Elite brand coffee products, cottage cheese, some Elite chocolate bars and olive oil.
“We believe that carrying out a proportional price update is a condition for maintaining a balance between the needs of the public, the company’s employees, its suppliers, its customers and the many public investors … in an environment where the high inflation in the world and in Israel is clear,” said chief executive Eyal Dror.
He said price hikes were a last resort, with the company previously absorbing higher costs and making efficiencies including through layoffs.
Israel’s inflation rate was 5.1% in October and Dror said the trend of elevated costs was expected continue in the coming months.
($1 = 3.4414 shekels) (Reporting by Steven Scheer; Editing by Kirsten Donovan)