The Israeli government on Tuesday ordered a review of competition in the consumer goods market, stepping up pressure against plans by suppliers of products from cereal to detergent to raise prices by dozens of percent, as the economy recovers from the COVID-19 crisis.
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Finance Minister Avigdor Lieberman and Economy Minister Orna Barbivai on Monday sent letters to the heads of seven leading companies to urge them to cancel planned price increases that have stirred public anger.
Osem, one of Israel's largest food producers, said it would put on hold its plans for a price increase of an average of 5% for three months until after the Passover holiday "during which time there will be an in-depth examination of various ways to mitigate the rise in prices of consumer goods in Israel."
Osem, a unit of Nestle, had said it was forced to raise food prices in light of a jump in its manufacturing and transport costs.
Lieberman has argued that a much stronger shekel against the dollar and euro means that import prices should fall, but so far this has not been passed to consumers, with producers citing higher raw materials and shipping costs.
Food producer Strauss and Sano, a maker of cleaners and other home products, also said they won't raise prices, Lieberman's spokesperson said.
"We will examine the other companies' activities with all means at our disposal," Lieberman said in a statement. "I have referred this to the Price Committee, which will quickly examine the companies' use of their market power to rake in excess profits."
The interministerial committee regulates prices of goods such as milk, eggs and bread and has the authority to add price controls on other products.
Lieberman asked the panel to look at prices at the other companies - sales and distribution group Diplomat, confectionary specialist Leiman Schulssel, consumer goods distributor Schestowitz and food importer Ristretto.
Leiman Schulssel and Schestowitz said they would respond directly. Ristretto was not immediately available for comment.
Food prices in Israel, excluding fresh produce, rose 3.5% last year, but in recent weeks a number of companies have said they would raise prices amid the increasing cost of raw materials and transport, with inflation rising abroad.
News websites have urged consumers to buy cheaper alternatives, although the food market is controlled by just a few large companies, while importers are mainly monopolies.
Social media has been teeming with calls for consumer boycotts on companies that go ahead with the move.
Lieberman has previously said he sought to end monopolies for importers.
Israel's Competition Authority on Monday said it was checking whether price hikes were within the provisions of food laws.
Israel's inflation rate reached 2.8% in 2021, its highest in eight years but still below much of the West. The central bank has insisted there is no concern over inflation at this time.
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