Israeli producers reject blame for rising prices, say govt at fault

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Food items produced by Israeli company Strauss Group are seen on display at a news conference in Tel Aviv, Israel March 13, 2019. REUTERS/Tova Cohen

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JERUSALEM, Feb 2 (Reuters) – Israel’s main industrial group on Wednesday fired back at the government over high prices, saying it was the state’s fault for raising the costs of electricity, fuel, water and property during the COVID-19 crisis.

Finance Minister Avigdor Lieberman and Economy Minister Orna Barbavai on Monday pressed leading suppliers and importers to cancel planned price increases that have stirred public anger while the economy is recovering from the pandemic. read more

In letters to seven companies, they cited a strong shekel against the dollar and euro, meaning that import prices should fall. The called the price hikes “cynical and offensive”. read more

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Lieberman on Tuesday asked the government’s price committee to review competition in the consumer goods market and the Competition Authority was also checking whether price hikes were within the provisions of food laws. read more ]

Osem, a unit of Nestle (NESN.S) and one of Israel’s largest food producers, said in response it would delay any price rises for three months.

The Manufacturers’ Association, which represents some 1,500 firms and 400,000 workers, laid much of the blame for price increases on the state.

“If the government wants to reduce the cost of living, it must reduce prices of electricity, water, property taxes and fuel tariffs that have jumped by tens of percent in recent years,” said the group’s president, Ron Tomer.

“The government cannot on one hand sharply raise tariffs and on the other expect prices to fall.”

On Tuesday, state-run electricity rates rose 6% while petrol prices also increased.

Tomer said transportation costs of raw materials had risen at least 400% in the last year, while higher wages, water prices and excess regulation and quarantine had also led to an increase in costs.

“The strengthening of the shekel … is nothing compared to the series of price increases under the sole control of the government,” Tomer said.

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Reporting by Steven Scheer; Editing by Nick Macfie

Our Standards: The Thomson Reuters Trust Principles.

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