Just a month before Passover, prices for chicken are rising again. This week, poultry producers and marketers sent new price lists to retailers. "Globes" obtained a copy of the Milouoff Ltd. price list, which shows that the price of fresh chicken was raised by 8.2% to NIS 15.80 per kilogram, before VAT, as of Monday.
The price of chicken has risen by 75% over seven months. The last time that the price of chicken was raised was in December 2012, when the price rose by 40% within two months to NIS 14.80 per kilogram, before VAT.
The price hike for whole chickens was the lowest, compared with the other price hikes, which are particulalrly steep: the price for chicken breasts and thighs rose by 20%: the price of thighs rose from NIS 16.50 per kilogram to NIS 20 per kilogram; and the price of breasts rose from NIS 19.50 per kilogram to NIS 23.40 per kilogram. With the addition of VAT, the retail price of chicken breasts has reached an all-time high of NIS 27.40 per kilogram.
A careful examination of the new price lists raises serious concerns that poultry producers are seeking to increase their profits on the products with the greatest demand for Passover, especially products for the grill. For example, the price of chicken livers rose by 24.3% to NIS 17.40 per kilogram, before VAT. The price hike is triple the price hike for whole chickens.
The price hikes are even greater for other products. The price of chicken steak is due to soar 30%, the price per kilogram for gizzards will rise by 40%; and the price for wings will rise by 54.5% from NIS 5.50 per kilogram, before VAT, to NIS 8.50 per kilogram, before VAT.
Exploiting demand
All the retailers with whom "Globes" spoke said that the price of chicken between slaughterhouses and marketers was too similar, which was not the case in the distant past, and which raises suspicion of price-fixing by at least some parties.
"They are exploiting the heavy preholiday demand and the small supply to raise prices," said Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) CEO Rami Levy in response. "It's true that some slaughterhouses are losing money, but that does not mean that they should be allowed to create a cartel, because a cartel will harm everyone in Israel. The middle ground should be found where slaughterhouses can continue to survive while preventing a cartel."
Levy added, "I think that price controls should be instituted on chicken. The moment that chicken prices fall under government control, it will be possible to protect slaughterhouses and growers, as well as consumers. Chicken is a basic product, and we should not return to the situation of 40 years ago, when we ate chicken once every couple of weeks or once a month."
Published by Globes [online], Israel business news - www.globes-online.com - on February 27, 2013
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