Tnuva announces a price increase of 3.5% on average; the price of cottage cheese will not go up

  • In light of the rise in price of raw milk by 9.4% and increased production costs – the prices of the unregulated products of the dairy concern (which represents only about half of the income of the concern) will go up by an average of 3.5%. The price of cottage cheese will not go up until the decision on an increase in prices of regulated products
  • 25-10-2012

Arik Schor, CEO of Tnuva: "The price increases are due to an increase in the price of raw milk of 9.4% and increased production costs of hundreds of millions of shekels a year. However, Tnuva is acting with the utmost sensitivity with regard to the basic products that it produces, and so soft white cheese will go up at a significantly lower amount (by 2.5% only) and cottage cheese, whose price is not regulated, will not go up until the Government decision on an increase in prices of regulated products".

Tnuva Group today announced the updating of the prices of its products to chains and retailers, which will take effect at the beginning of November. Unregulated dairy products will rise by an average of 3.5%. Tnuva said that although the price of cottage cheese is not regulated, its price will not go up until the Government decision on an increase in prices of regulated products out of sensitivity to the public. It was also reported that soft white cheese will go up only 2.5%.

It was reported by Tnuva that this increase was necessary and results from the increase in the price of raw milk at the beginning of the month by 9.4%, and an increase in production costs, including water, electricity, property taxes, fuel and packaging entailing hundreds of millions of shekels in extra annual costs for Tnuva, costs which Tnuva absorbed and continues to absorb in the past year. Even after this price increase, Tnuva is still absorbing heavy production costs, given the rise in price of raw milk in regulated products (milk, Haemek deli cheese, Gilboa deli cheese, Gil, Eshel, sour cream, butter), whose price will not increase until the signing of the Regulatory Orders.

Tnuva CEO, Arik Schor, said today: "Despite the rise in the price of raw milk and increased production costs, we made the lowest update we could and will continue to absorb some of the costs. You have to remember that close to 50% of the turnover of the dairy concern is regulated (or regulation linked) by the Government".

Schor added: "Tnuva 's conduct in the context of the prices of cottage cheese and soft white cheese demonstrates our understanding that these products are staple items and are in every home in Israel, and so we find the utmost sensitivity that their price. The price of cottage cheese will not go up until the Government decision on increasing prices of regulated products, despite cottage cheese not being regulated. Additionally, the price of soft white cheese will only go up by 2.5% out of a desire to be considerate of the consumer public as much as possible".

Schor referred to the considerations faced by Tnuva: "In October last year, Tnuva lowered the prices of its products for a total cost to consumers of about NIS 130 million. Since then we are trying to find the balance between consumers who are entitled to lower prices, and the need for Tnuva to deal with increased production costs that translated into a cost of several hundred million shekels.

The desire to maintain this balance is at the top of Tnuva’s priorities. Maintaining the balance is also a major consideration for the current price rise and the hypersensitivity to cottage cheese and soft white cheese. The balance between consumers and Tnuva’s need to deal with rising input prices will continue to be a consideration in the future".

Below is the rate of increase of the product groups:

Cottage cheese - no change (to be updated in accordance with changes to be decided by the Government with the rise of regulated products)
Soft white cheeses - 2.5 %
Whipping cream - 2.5%
Milk beverages - 4.8%
Enriched milk - 3%
Yogurts - 4.8%
Delicacies - 3.5%
Packaged yellow cheese - 4.8%
Salty cheeses - 4.8%

Tnuva also announced that the prices of Sunfrost products, Maadanot, Mama Off, Olivia, and Adom Adom will be increased by an average of 4.6% (Sunfrost - 4% ; Maadanot - 5% ; Olivia - 5%; Mama Off - 5 %, Adom Adom - 4%). This increase is due to a rise in input costs and increased prices of raw materials (wheat, chicken, oil, etc.), and an increase in production, including electricity, water, fuel, property taxes and others over the last year.

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