In the face of a threatened consumer boycott, Osem Investments Ltd. (TASE: OSEM) today announced that it will cut the prices of 35 products by 5-10% on November 1, and will also distribute NIS 5 coupons for Materna infant formula products.
The cottage cheese boycott leaders are demanding Osem cut prices on products by 30%, especially Materna. The Tel Aviv University Student Union, which has also threatened to lead a consumer boycott against the food company, welcomed today's announcement. The union is considering targeting Osem's rival Strauss Group Ltd. (TASE:STRS).
Osem will cut prices for ketchup, soup croutons, pasta, powdered chicken soup, soy source, and biscuits. Subsidiary Tivall will cut prices on its frozen hummus and corn, and Sabra Salads will cut prices for tehina.
As for Materna, Osem will apply the pricing model used in the US, adding coupons to 11 different infant formula products.
In a separate development, the cottage cheese boycott leaders have asked Antitrust Authority director general David Gilo to declare Osem a monopoly in the infant formula market. Gilo replied that the issue was being examined, which would take time.
Osem's share price fell 1.5% today to NIS 50.60, giving a market cap of NIS billion.
Published by Globes [online], Israel business news - www.globes-online.com - on October 24, 2011
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