Israel’s Ministries of Finance and Economy and Industry sent warning letters on Sunday to the heads of major food companies and retailers in Israel, urging them to reverse their decisions to raise prices on food products this year. The ministries cited citizens’ economic hardships brought on by the COVID-19 pandemic, as well as the recipient companies’ multi-million-dollar financial information or executive bonuses for 2021.
The ministries said they expected the food retailers to “be responsible” and withdraw their announcements of price hikes in a country with an already high cost of living.
“We will continue to monitor prices to the Israeli consumer, with the appropriate sense of national responsibility, and in this context, we will not hesitate to take the required steps to secure a fair, competitive economy,” read the letters, signed by Finance Minister Avigdor Liberman and Economy Minister Orna Barbivai.
“Your announcement[s] of price hikes at this time is cynical and offensive to the citizens of the country,” Liberman and Barbivai said in a joint statement.
The missives were sent to seven food and cleaning supplies retailers in Israel including Strauss Group, Osem (owned by the Swiss company, Nestle), and Sano.
In the letter to Strauss Group President and CEO Giora Bardea, the ministers said the company — one of Israel’s biggest food conglomerates with dairy, salad, snacks, and dip products — registered record profits in 2021 and strong margins in Israel, compared to other countries that sell its products.
“The company paid dividends in 2021 of an overall NIS 270 million ($84 million), a record number…in the past decade,” the ministers wrote, criticizing the company’s current prices which they said were “higher than the world average.”
In a letter to the CEO of the Israeli sales and distribution company Diplomat, which imports food and home products from major brands like Tide, Kellogg’s, Illy, Pampers, and Starkist, the ministers noted that the executive received a NIS 11.5 million ($3.61 million) bonus in 2021.
The ministers wrote in all the letters that the strong shekel combined with low inflation and wage increases in 2021 “meant that products and raw materials brought by your company to Israeli were cheaper for you, without you reducing your prices for the Israeli consumer accordingly and [these prices] were among the highest in the world for these products.”
The letter said that Israel’s economy was strong, but the global health crisis was not over. “People and small businesses did not recover from the…
Read More: Finance, economy ministries warn major food companies against price hikes