Israel faces higher food costs as milk prices spike

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Israel is braced for another wave of steep food price increases, putting more pressure on the government to live up to its promise to lower the cost of living while policymakers continue to battle persistent inflation.

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All four of Israel’s main dairies will increase prices this week after state-controlled milk and other dairy costs increase more than 8 percent. A deal between the Finance Ministry and suppliers has prevented a far steeper hike.

Tnuva, Israel’s biggest foodmaker that is owned by China’s Bright Food and Dairy Co, said products subject to state price controls would go up 8.28 percent, while unsupervised dairy products would rise 4.65 percent as a result of the increase in the price of raw milk.

Rival Strauss said that as of May 10 dairy prices on products such as cottage cheese and yogurts would go up an average of 2.33 percent. “The price increase covers only a small part of the total price increase the company suffers,” it said.

Rami Levy, one of Israel’s largest supermarket chains, said it would not raise prices on dairy products.

The country’s largest supermarket chain Shufersal,, declined to comment. One source close to the firm noted that when costs went up in November, Shufersal stood firm against Tnuva and did not sell its products for some time, leading to running out of dairy products and losing customers.

At the same time, another source said that Diplomat, one of the largest importers in Israel, is seeking to raise prices between 7 and 25 percent.

“Many of our suppliers raised prices for us in 2022 and we absorbed them,” Diplomat said in a statement without elaborating. It added it would make an effort not to raise prices in future.

Inflation eased to 5 percent in March from 5.2 percent in February. The Bank of Israel has battled inflation with steep rate increases over the past year.

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