Dairy Shortages Hit Israeli Shelves Amid Holiday Rush and Pricing Issues
Translated & summarized from Bizportal by baba
Israeli supermarkets are facing shortages of cottage cheese and white cheese, particularly smaller containers, due to holiday production disruptions and economic incentives favoring unregulated products. Consumers are being pushed towards more expensive alternatives, with the situation expected to resolve within a week.
The story in 5 lines · by baba
- Dairy shortages hit Israeli shelves due to holiday production gaps.
- Price-controlled dairy products disappear first, favoring expensive alternatives.
- Consumers face significantly higher prices for substitute dairy items.
- Market concentration and production halts exacerbate scarcity.
- Shortages are expected to end within about a week.
Israeli supermarkets are experiencing shortages of popular dairy products like cottage cheese and white cheese, particularly the smaller 250-gram containers, with brands such as Tnuva, Tara, and Strauss affected. This recurring issue, often exacerbated by holiday periods, leaves consumers facing significantly higher prices for alternatives. The immediate cause for the current scarcity is the proximity of the Rosh Hashanah and Yom Kippur holidays to weekends, reducing dairy production days. The Israel Dairy Board had warned of potential localized shortages due to this disruption in the production cycle.
Cottage cheese and white cheese are fresh products with short shelf lives, preventing large-scale pre-holiday production and storage. Resuming production after a halt requires several hours to restart machinery, hindering the ability of dairies to quickly meet demand. Industry experts anticipate the shortage will resolve within approximately one week.
The situation highlights a significant price disparity. While 5% white cheese in a 250-gram container is price-controlled at a maximum of NIS 5.87, unregulated cream cheeses, such as Tnuva's 9% Napoleon, can cost between NIS 9.90 and NIS 18.90 for a 225-gram package. This price difference can exceed threefold when comparing per 100 grams, pushing consumers towards more expensive options.
The disappearance of cheaper, price-controlled products first is attributed to market structure. Products like cottage cheese and cream cheese are not on the list of price-controlled dairy items updated by the Ministry of Agriculture in May, which includes fresh milk, yogurt, sour cream, and some yellow cheeses. Dairies have a clear economic incentive to prioritize the production of unregulated, higher-priced items when capacity is limited, leading to the disappearance of regulated goods.
This shortage follows a separate incident in July where Tnuva's cottage cheese was unavailable due to a malfunction in the company's automated warehouse. Both events underscore the market's sensitivity, with a few large dairies supplying most soft cheeses in Israel. When one halts production, there is little capacity to compensate, a concentration that has concerned the Ministry of Finance. The ministry has previously criticized Tnuva and Strauss over milk prices, with increased import liberalization suggested as a solution, though imported cheeses are not always cheaper.
Consumers are advised to wait for shelves to restock if possible, check for larger 500-gram containers of white cheese, consider store brands, and compare prices per 100 grams. Switching to full-price cream cheese solely due to the temporary unavailability of white cheese is discouraged.
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