2024-02-01 21:11:21
A number of food companies have announced price increases in recent days. Asem announced yesterday (Wednesday) a 9% increase in the prices of some of its products and well-known brands. Unilever also announced yesterday the increase in the price of ice cream and chocolate products by 4.7%-15% from March 1.
“Due to the very significant cumulative price increases, we are forced to update the price list for retailers of a small part of the company’s products that are most significantly affected by these price increases,” said Unilever, “including Sabar salads, Tivol, noodles for soup, Bonjour, ketchup and sauces, cookies and chocolate-based products “.
These products occupy about 14% of the company’s total products alone, most of which are produced in the industrial plants in the south. The price list will be updated in a range of about 3%-9%, which is about 1% of the company’s total price list. According to the company, this price increase will balance only part of the increase in the company’s expenses, and it will absorb the other part.
According to an analysis published by the research division of the Bank of Israel yesterday, “the war creates pressure for price increases in the food industry in the short and medium term.” The analysis shows that during the war an average price increase of about 2% was already measured in the food basket (without fruits and vegetables).
The price increases come at a time that makes it particularly difficult for households, about 62% of which were financially damaged by war, according to a survey by the Bells organization.
Damage to household incomes following the Iron Swords War (according to the survey data of the Bell Organization)
Prices are rising despite an 8-9% drop in the dollar and euro exchange rates since the peak at the end of October, which makes imports cheaper. The United Nations food price index, which measures the cost of basic food, has also fallen by 10% in the past year. While the prices of coffee, sugar, rice, cocoa and olive oil have risen in the past year at the global level as well, the prices of other goods have fallen, including milk, oil , oats, soybeans and wheat. Unlike the previous wave of price increases, this time the food chains are not waging any fight on the issue.
Rising prices across the food industry without government response
The wave began with Shastovich’s announcement about a month ago about an increase in the prices of some of its products by an average rate of more than 10%. Two weeks later Strauss also announced a price increase in a quarter of its products of 5%-25%. Canning producer Beit Al-Hasita raised prices by about 15%, and competitor Yachin also raised prices by about 10%. Vysotsky raised the prices of tea by 8%, Tahinat Barakh became more expensive by about 10%, and the importer Vilipod raised the prices by 15%. The legume manufacturer Sugata raised prices by about 5-10%, and the prices of some of its products increased by 40%. The olive oil produced by Yad Mordechai also became more expensive by about 25%. In the entire industry there is a widespread transition to the sale of imported olive oil, and the volumes of Israeli olive oil at the major retailers are plummeting.
Only recently did the State Comptroller find severe deficiencies in the governmental price control system, even though food in Israel is 51% more expensive than in the European Union, and despite the existence of proven circumstances that facilitate price gouging, such as concentration in the food market and abnormal profitability among large food importers. The response of the Budget Division in the Treasury to the State Comptroller’s inspection revealed that the reduction in the use of price controls was not done out of neglect, but on purpose, even in market segments where there is no competitive solution. The auditor stated that this is a policy that contradicts a government decision that adopted a recommendation of the Trachtenberg Committee from 2011 to improve the use of price controls.
Government decisions also make energy more expensive. The increase in electricity, fuel and cooking gas prices will increase energy expenses by about NIS 100 per month for an average household compared to 2023, according to a calculation by the Israel Energy and Environment Institute (formerly the Petroleum Institute). The increase in the price of fuel and electricity from today alone is worth about NIS 42 per month for an average household. The government has a share in the increase in energy prices, due to the cancellation of the tax discount on fuel and the increase in the tax on coal. Starting next year, the country is expected to gradually increase the tax on cooking gas by 5 times within five years.
Talk today every morning with your email
#wave #price #increases #economy #Stovitch #Asem #Unilever #raising #prices