Israel: Government approves 12,5% hike

Tel Aviv / IL. (jp) The government backed down to demands of bakery owners and agreed to raise the price of subsidized breads by 12,5 percent, ending the two-week long crisis that had led to a shortage of these breads, mainly bought by the poorer population, on supermarket shelves. «We have not yet received the new price-controlled bread directive and a date, which would allow us to raise prices for these breads and until then we can not commit to resume full production of price-controlled breads», Yochanan Aharonson of Davidovich Bakery + Sons Ltd., who is also acting as the bakers´ representative in the talks with the government, told Jerusalem Post.

The cabinet approved the recommendations of a special committee, which was established to investigate and settle the matter of government-controlled bread prices. According to the recommendations of the committee, headed by the Director-General of the Prime Minister´s Office Ra´anan Dinur including representatives of the Ministry of Industry, Trade and Labor and the Finance Ministry, social security benefit seekers would be eligible for a monthly allowance in compensation of the 12,5 percent hike in bread prices, which is expected to come into effect immediately.

A survey conducted by the Histadrut Labor Federation consumer group found that 77 percent of the public believed that basic foods such as bread should remain under government controlled price regulation. Furthermore, the survey showed that still 42 percent of Israeli residents were buying price-controlled breads.

Since the beginning of July the country´s major bakeries, including Angel Bakery, Davidovich, Berman´s and the Alumot Bakery in Holon, decided to halt the production of price controlled breads as mills raised flour prices by some 35 to 40 percent in response to the recent sharp rise worldwide flour prices.

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