Food giant Osem halts price increase following meeting with Kahlon

Regulated dairy products are expected to go up in price by 2-5%, regulated bread prices will rise 3.5%. Electricity prices are planned to increase by 7%.

DECEMBER 19, 2018 10:37

Updated: DECEMBER 19, 2018 15:31

Consumers at a supermarket, illustration (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST) — Consumers at a supermarket, illustration

(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

Osem, one of the largest food manufacturers and distributors in Israel, decided to postpone the anticipated price increase after a meeting with Finance Minister Moshe Kahlon on Tuesday evening, Finance Ministry representatives reported.

Osem's CEO and Chairman met with Kahlon for a discussion on their activity with the Electricity Authority to moderate the rise in electricity prices. The Finance Ministry is examining tariff cancellation on a series of raw materials used by Osem for food production.

As a result, Osem decided to postpone the anticipated price increase at this stage.

Earlier this month, several major food companies announced they would be raising prices. Regulated dairy products are expected to go up in price by 2-5%, regulated bread prices will rise 3.5%. Electricity prices are planned to increase by 7%.

As a result, leaders of the "yellow vest" demonstrations, inspired by the riots in Paris, appeared at the meeting of the Knesset Economics Committee in protest to the expected rise in electricity and food prices.

The leaders called Osem's decision a victory and announced their decision to target Tnuva, a major food company, next.

Yellow vest protestors also took to the streets of Tel Aviv last week demanding decrease in the cost of living.

On Monday, Finance Minister Moshe Kahlon said of the protests: “You can take off the vests; we’re taking care of it — in the last 3 and-a-half years, the cost of electricity, water and food went down. We subsidized daycare, opened saving accounts for all children, reduced social gaps and marginal populations got the opportunity to live with much more. Salaries grew significantly, by 12%.”

Israeli food prices, however, are still 19% higher than the OECD average, as reported by the Finance Ministry in April.

Lahav Harkov contributed to this report.