Growth is good, but not good enough
A "Globes" survey found that Israelis are changing their consumer habits.
A survey by Rotem TRI for "Globes" found that 34% of consumers have cut back their purchases as a result of the tent and other protests, and that 60% of consumers look for cheaper products when shopping. In both cases, more women than men said that they had changed their shopping habits.
22% of respondents have cut their spending on food, 11% on entertainment, 11% on clothing, and 7% on dairy products. Spending on housing, water and other utilities were at the bottom of the list.
A quarter of respondents are boycotting companies in response to the recent events: 56% of respondents are boycotting Tnuva Food Industries Ltd., 11% are boycotting foreign goods; 10% are boycotting food company Strauss Group Ltd. (TASE:STRS), 5% are boycotting fashion brands, supermarkets, Huggies diapers, and Coca-Cola.
The value of the cottage cheese war should not be minimized. The decision to pick this common product to spearhead the protests was sagacious, although changing the dairy market is a complex issue that is still under discussion. The proposed dairy reform is controversial. Imports of dairy products are still on the agenda and meanwhile prices have not been lowered - with the exception of cottage cheese. The price for white cheese has even climbed.
Cottage cheese boycott organizer Itzik Alrov agrees that no real change has occurred in the market, but consumer behavior has changed. "People who previously never bothered to look at the price, now carefully check prices very carefully before putting products into the cart," he says. "People are saving hundreds of shekels in their monthly shopping."
Alrov advises the public not to buy cottage cheese for more than NIS 5 per container or dairy puddings for more than NIS 2.90, and to seek out cheaper cheeses at the deli counter.
11% of respondents were very knowledgeable about products that are price controlled, 46% could name some price-controlled products (usually milk, the standard loaf of bread, and eggs), and 43% could not name price-controlled products.
Asked if they were more knowledgeable about price-controlled products as a result of the cottage cheese boycott, half of respondents said yes, but half said no. 40% of respondents said that they prefer price-controlled products.
Diaper protest wanes, prices rise
The parents' protest about the high cost of diapers and other infant products, and calls for price controls, has given way to wider, more pressing, demands for subsidized daycare and education. Supermarket sales on diapers have disappeared as a result, and prices are back at the pre-protest levels.
Gasoline price rise halted
Protests against rising gasoline prices preceded the tent protest by months - and worked. In February, the government rescinded the NIS 0.30 per liter hike in the excise, just one month after it came into effect.
Gasoline protest leader Zeev Grower said, "At the level of principle, we've had successes. They may not be enough, but we achieved something. In February, they cut the excise, they've cancelled future hikes, and [Prime Minister Benjamin] Netanyahu is trying to get [Minister of Finance Yuval] Steinitz to lower the cost to consumer by reducing indirect taxes." He believes that the success strengthened the protest movement as a whole. "The slogans quickly changed to the general cost of living and social justice for everyone," he says.
The final objective he says is to halve the excise to 30% from 60% and to restore price controls on diesel.
Electricity hike halved
The proposed 20% hike in electricity rates was halved following the last-minute intervention by Netanyahu. The Knesset Finance Committee approved a Ministry of Finance directive cutting the excise on diesel for the generation of electricity by 69% until the end of 2011. What will happen then is still not known.
The excise cut was controversial. During the Finance Committee debate, some members said that the NIS 1.5 billion cost of the measure ought to be used for daycare.
Published by Globes [online], Israel business news - www.globes-online.com - on August 18, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011
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