Barn beeps at her customers, just because she can
In a normal market, a food giant must be attentive to consumers, otherwise they may boycott its products.
What Osem has done in Israel - with a sharp rise in prices that ignores consumers - testifies not only to it but also to the system that operates the competition authority specifically against retailers
Yehuda Sharoni
29/12/2021
Wednesday, 29 December 2021, 10:03 Updated: 10:18
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The competition authority caused a lot of noise when it began last month investigating retail chain executives such as Itzik Aberhahn from Shufersal or Rami Levy, on suspicion of a price cartel. In practice, it turned out that the address for the Competition Authority's claims was not the retailers, but manufacturers such as the food giant Osem.
The Nestle Barn Group, owned by Global Nestle and managed by Avi Ben Asaig, yesterday informed retailers of its intention to price a series of hundreds of food products at a rate of 3% -7% and an average of 4.6%. As the third largest food product manufacturer in Israel, Osem is leading a move that no other food manufacturer dared to do before it - and it is quite possible that this step will also signal to its competitors that they will also rush to raise prices.
The harsh media criticism has prevented this to this day.
Retail chains have also made it clear that such a move at the current time is problematic.
Although other manufacturers such as Snow have raised prices by 6%, they are not a major player in the field of essential food products, such as pasta, coffee, cereals - and a number of other products that are consumed by almost every Israeli.
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Avi Ben Asaig, CEO of Osem. Is foreign ownership less attentive to the feelings of the Israeli public? (Photo: Itzik Shokel)
The unbearable ease of ignoring the public
The increase in prices includes hundreds of products, including bamba, pasta, cereals, soup almonds, Tester's Choice coffee, other snacks such as beeswax and apropo, ketchup, cakes and more.
True, most of these products have a replacement provided by competitors, but the fear is that if Osem does not fold and withstand public pressure, then the next in line will be dairy producers, led by Tnuva and Strauss, who will price the regulated products following the updated target price of milk.
Almost as unfortunate as the rise in prices itself, is only the answer to the question of why Osem felt comfortable making a range of basic consumer goods, in an age where the talk of the cost of living occupies a prominent place in the media and public discourse?
Barn does this because she can afford it, and perhaps foreign ownership allows her to ignore the sounds of the public heart. Three years ago, when she dared to make a similar move, its managers were invited to the office of former Finance Minister Moshe Kahlon, and after being warned, they withdrew from the decision.
What was true of Kahlon is different today.
The wind blowing in the direction of the current finance minister Avigdor Lieberman is different, so Bassem was not afraid of making the move, which as expected was explained by the increase in costs.
However, they have chosen to emphasize that Materna's baby food products will not become more expensive.
The Osem management responded
: "Raw materials, packaging and transportation costs have skyrocketed by tens to hundreds of percent, unparalleled in the past. In the long run, we are forced to make an update that only partially compensates for the increase in input prices. "
Of money
consumption
Tags
barn
Cost of living
Price increase
Yehuda Sharoni
