Tnuva Responds to Price Controls

YERUSHALAYIM -

The announcement of government price controls on some cheese and milk products on Monday reverberated not only in the Israeli media but at the dairy giant Tnuva, Globes reports.

Mivtach Shamir, which controls Tnuva, notified the Tel Aviv Stock exchange on Tuesday that they will “take steps” to reduce the impact of an estimated 20% price reduction in white soft cheese and whipping cream.

Tnuva said the measure announced by Finance Minister Yair Lapid and Minister of Agriculture Yair Shamir could have a material adverse effect on its business.

Company officials said it was premature to estimate how much effect the new pricing would have, nor how far their response will mitigate that effect. One possible counter-measure under discussion is a reduction in the discounts Tnuva allows to supermarket chains on other products.

The governmental measure is the first market intervention of its kind since the cottage cheese boycott of the summer of 2011, which touched off a wider series of demonstrations against high prices.

Later Tuesday, the price controls came in for ridicule aimed at Lapid by senior Labor MK Eitan Cabel. “Only a genius or a magician would … be able to find a solution for the housing shortage and high living costs by lowering the price of 38% fat cream by half a shekel,” he said.

“This is sensational news for those who cannot make ends meet — if there is no bread, let them eat cream cakes.”