Wall Street Journal lauds Israel's cottage cheese protest

Israel's successful Facebook campaign opposing high cottage cheese prices is making waves abroad. The Wall Street Journal granted extensive coverage to the Israeli boycott over the weekend.

"Israel's powerful dairy companies have surrendered to a three-week boycott and pledged to lower prices on cottage cheese," Charles Levinson reports in an article dated July 1. "The showdown over the price of cottage cheese ... is being hailed by some Israeli pundits as the country's version of the Arab Spring."

The popular movement in Israel to lower the price of cottage cheese began June 9 with the creation of a Facebook page by Itzik Alrov, a young ultra-Orthodox man from Bnei Brak.

"The boycott has tapped into widespread Israeli anger with rising prices," the article says."With the strong shekel and high taxes, Israelis pay higher prices for many goods than consumers in other developed countries, though their average salaries are lower ... As public anger grew, the government stepped in, threatening to reimpose price controls on the dairy market if the industry didn't find a solution."

Levinson continues that at first, the dairy companies stood firm, refusing to lower prices.

"Large segments of society appear to be increasingly angry at widening gaps between rich and poor, and at the concentration of wealth in the hands of a few families," the article says. "In recent decades, as Israel transitioned into a developed free-market economy, state-backed monopolies such as Tnuva's grew outdated." Levinson adds that the government abolished price controls on cottage cheese in 2006.

Citing insiders with knowledge of Tnuva's investment strategy, Levinson writes, "In 2008, Tnuva was sold to Apax Partners, a London-based private-equity fund that moved aggressively to maximize profitability with an eye to reselling it down the road."

　

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