Israel's first Facebook-fuelled consumer boycott scored a victory Wednesday when dairy producers Tnuva, Strauss and Tara gave in to public pressure and announced a cottage cheese price reduction to NIS 4.55 wholesale, which would mean a NIS 5.90 price tag for the final consumer. "It's not enough: we will continue to fight," one of the boycott's leaders said. It's nothing short of a revolution. Dairy companies had raised the price of cottage cheese by dozens of percentage points in recent months. Two weeks ago the price hit NIS 8 per container, prompting the Israeli public to join forces and say "enough!" For two weeks many consumers refrained from putting the popular cheese into their shopping carts. The companies began to feel the squeeze, which was compounded by petitions on social networks and pressure from politicians. Failing to appreciate the public's power and resolve, the companies initially refused to address the matter. On Wednesday, after a two-week boycott, Tnuva was the first to announce a drop in prices. The other two cottage cheese producers Strauss and Tara quickly followed suit, slashing the price of cottage cheese to NIS 4.55 per (approximately 8 oz.) container for retailers. Don't buy pudding "Since authorities have failed to act swiftly to help consumers by creating a basket of staple goods at a long-term affordable price, we decided to lower the price of cottage cheese for retailers. We expect those up and down the food chain to also do their part to lower prices and respond to the justified consumer outrage. This includes the Israeli government, farmers and retailers," said CEO of Strauss Israel, Zion Balas. Itzik Alrov, one of the organizers of the Facebook campaign against the price of cottage cheese, welcomed the price reduction on Wednesday but called for the continuation of the struggle. "We welcome the price reduction, but this is not what we had in mind. We spoke of NIS 5 per container--it shouldn't cost more than that. Talks with thousands of people show that the public will have none of it; if this is all Tnuva can do then we welcome it, but it is still not enough," Alrov said. Alrov says he was not blown away by the price reduction: "This is a ploy. They still think the public is naive, as if the problem is limited to a specific product or a well-defined period; but the truth of the matter is that this just scratches the surface. We know full well that there has been a long-standing market failure and that for the first time Israeli consumers rose up and asserted that they are not saps." Alrov called on the public to join the next campaign to lower prices, which would now focus on overpriced yogurt and pudding. "Currently we ask that the public refrain from buying yogurt or pudding products priced at more than NIS 2.90, and to favor yellow cheese from the deli counter over the pre-packaged kind, which can be sold for several times the price," he said. "Israeli consumers have spoken out and proved that they can effect unprecedented change in Israel. We call on dairy farmers, the government and all the supermarket chains that have yet to slash prices to chip in so that the NIS 5.90 cottage cheese price will endure," Tnuva CEO Arik Shor and Apax Partners Israel Office Head Zehavit Joseph-Cohen said (the latter is head of the company which owns Tnuva). Ministry of Industry, Trade and Labor Shalom Simhon announced this week the appointment of a commission to investigate food industry failures. The panel is scheduled to report its findings within four months. The minister told participants at a conference held in Tel Aviv that he had recommended the plan to lower VAT rates in 2012 tackle the price of food, first and foremost. The price of fuel and medicine to drop The [price-drop] story does not end with cottage cheese. The Knesset Finance Committee unanimously approved Wednesday a cut in prescription drug co-payment rates by a third, as of 1 August. The benefit could save patients between NIS 20 and NIS 500 per month depending on their drug regimen, according to the Finance Ministry's Budget Division representative. The public is also going to enjoy lower fuel prices starting Friday, with the price at the pump expected to drop by NIS 0.24 per liter.
