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The cost of cottage cheese, an Israeli food staple, has risen 40 percent in three years.
Blood-Curdling!
Cottage cheese becomes a symbol of
Israeli frustration with rising food prices.
Dina Kraft
Jewish Telegraphic Agency
Tel Aviv
or Israelis, cottage cheese is no
mere dairy product.
Whipped to exceptional creamy
and airy perfection, it is a coveted staple
of tables across the country. Israelis spend
$440 million per year on cottage cheese.
But now, with the price of a 9-ounce
container climbing to just above $2, cot-
tage cheese has become the focus of a con-
sumer revolt and a symbol of frustration
with the high cost of living in Israel.
"On principle, I'm not going to buy," said
Leah Buskila, 47, a stage manager pushing
her shopping cart past stacks of colorful
round cottage cheese containers in the
dairy section of a large grocery store in Tel
Aviv."It's important that people are unit-
ing about this."
Cottage cheese prices have jumped by
nearly 40 percent in the last three years.
Dairy companies blame the hikes on ris-
ing production costs, including the price
of raw materials and labor costs.
"It's just too bad there are not similar
boycotts for other things like the price
of gasoline or cellular phone charges,"
Buskila said, echoing a common refrain.
Prices in Israel for many items are ris-
ing, even though the shekel has barely
22
June 23 2011
budged against the dollar and economists
say inflation is mostly in check.
Gas costs more than $8 per gallon.
Buying a home has become prohibitively
expensive for most Israelis. On Sunday,
the government announced that it was
introducing a new law to facilitate a hous-
ing construction boom in order to reduce
housing prices.
For now, however, consumer anger is
focused on cottage cheese.
Boycott Called
Last week, a 25-year-old haredi Orthodox
cantor named Yitzhak Alrov started a
Facebook page calling for a boycott. The
page quickly garnered 90,000 members
from all walks of Israeli life. Alrov became
an instant celebrity.
"Cottage cheese is not the essence of the
struggle, it's just the symbol of a greater
protest," Alrov said at a news conference
last week.
The campaign surrounding cottage
cheese was sparked by an article in Globes,
the Israeli financial daily, which ran a story
comparing food prices in Israel to basic
food products in Germany. The Israeli prices
often were twice as high, the article showed.
"Seeing gaps of 100 to 200 percent high-
er, consumers woke up:' said Ilanit Hayut,
the newspaper's marketing correspondent.
Hayut also found that several Israeli-
made products, like some brands of soup
and tea, are sold in New York for half the
price as they are in Israel.
"Because here they don't have competi-
tion, companies take advantage of the
situation," she told JTA."Most companies
are monopolies in many areas, and the
consumer suffers."
But food companies say they have been
forced to raise prices not out of greed or
lack of competition, but because of global
increases in production costs and rising
prices for commodities like fuel and flour.
Indeed, food prices are rising around the
globe.
"La them check us all, from the dairies
to the retail chains:' Arik Shor, the CEO
of the Israeli dairy giant Tnuva, the main
producer of cottage cheese in the country,
said Sunday at a conference for Israeli
food producers. "The state should propose
its solution for coping at a time when the
prices of all food products abroad and in
Israel are rising."
Fruit and vegetable prices have
remained mostly stable, but prices for
other food products have increased by
5.1 percent in the past year, according to
Israel's Central Bureau of Statistics.
The Knesset Economic Affairs
Committee convened a special meet-
ing Sunday to call on dairy companies
to lower prices immediately and for the
government to reinstitute price controls.
The committee also said an investigation
needed to be launched into the overall
surge in consumer food products.
Since state supervision was lifted from
dairy products in 2006, the price of a stick
of butter has gone up by 39.1 percent and
a small carton of heavy cream has soared
by 69 percent.
"Israel is just extremely expensive, from
dental floss to deodorant:' said Omer
Moav, a professor of economics at the
Hebrew University who regularly travels
to London, where he is also a professor at
Royal Holloway University.
"How can it be that Kellogg's bran flakes
in Israel cost more than twice what I pay
for a box in London?" he said. "The fact that
Israel is extremely expensive compared to
other developed countries has nothing to
do with a world increase in raw materials."
Lack Of Competition
Maov, too, blamed a lack of competition.
Israel puts limitations on imports that
compete with its food products, and Israeli
dairy products have virtually no competi-
tion from imports — a limitation made to
protect local industry.
"The Israeli economy is not sufficiently
competitive," Maov said. "There is also the
high cost of moving goods with seaports
and airports controlled by unions, which
makes things less efficient. The economy
itself is largely controlled by a group of
very wealthy families who hire strong lob-
byists who work to reduce competition."
Complicating matters (although the
Finance Ministry is seen as having a
pro-market agenda — Finance Minister
Yuval Steinitz has threatened to "break
the monopoly" in the dairy industry) the
ministers from the Agriculture Ministry
and Industry, Trade & Labor Ministry
have veto power on importing food.
The editorial board at Haaretz ques-
tioned why it takes the price of cottage
cheese to galvanize the country.
"Consumer protests, for all their impor-
tance, just exemplify public apathy on
crucial issues that will influence the future
much more than price of cottage cheese
the editorial said, citing a recent comment
by Israeli President Shimon Peres that the
country was "about to crash into a wall."
Peres issued the warning, saying the
country was headed toward a situation in
which it will cease to exist as a Jewish state
because of stagnating peace efforts that, if
not resolved, could lead to a binational state.
"When we hit the wall, no one will
care anymore about the price of cottage
cheese," the editorial said.
But for now it's the cottage cheese
war and all it represents, not existential
threats, that preoccupy Alon Friedman, the
owner of a corner grocery store in central
Tel Aviv.
"Everything is expensive here he said
standing behind the counter. To the ques-
tion of how people get by, he grumbled,
"Everyone owes the banks." E