May 23, 2011

Israel to terminate dairy price control

The Israeli Finance Ministry perceives the period of price-controlled dairy goods to stop, dairy-sector sources told the media.

Senior finance officials have been pressuring Agriculture Minister Orit Noked to end the regulation, though her ministry reportedly objects vehemently to the move.

Some basic dairy products are still subject to government price controls, including milk; leben, eshel and gil yogurts; butter; and several kinds of cheeses.

While these products are limited in number, they still make up 30% of the public's dairy consumption, since they are 100% to 150% cheaper than products whose prices are set by the market.

The finance officials said competition between the country's large dairies and major retail chains is enough to keep prices reasonable should they be set by market forces, the sources said.

For its part, Noked's office said the list of price-controlled goods is limited but critical given the state of Israel's economy, and that the minister is scheduled to meet with finance officials to discuss the matter.

Dairy prices had been scheduled to be updated, but this has been delayed, apparently due to a conflict between ministries.

Sector sources say the price of milk should have increased 5%, while the price of other regulated dairy products should have increased 6.5%.