Strauss Israel CEO: US prices are to boost exports

The food company has gone on the counterattack against protests at the gap between its prices in Israel and abroad.

Strauss Group Ltd. (TASE:STRS) has gone on the counterattack against the consumer boycott of the company that is gathering strength following revelations of prices of its products in the US that are tens of percentage points lower than in Israel. Meanwhile, Ofra Strauss issued an invitation today to protesting mothers from the Israel is Dear to Us group to meet her; the meeting will take place tomorrow (Thursday).

Talking to journalists, Strauss Israel representatives said today that the US retailer buys most of the products that it exports at higher prices than those at which the Israeli retailer buys them. Nevertheless, and contrary to its earlier statements that it does not set the price to the consumer, that its US sales are via a distributor, and that the prices in question were a bargain special, Strauss has admitted today that it sells some products, among them Pesek Zman (Time Out) chocolate bars, at lower prices in the US.

Growing exports

Indeed, there are 12-13 products, among them Pesek Zman, for which the price to the US retailer is lower than the price to the Israeli retailer. Why? Because we want to export more and penetrate more. This is the spearhead for growing exports, Strauss Israel CEO Zion Balas said today.

Ohad Levy, who opened a Facebook page campaigning against Strauss, told Globes today that the campaign would be intensified.

We have officially announced a boycott of all Strauss products. The traffic on the Facebook page is extraordinary, and there is an amazing response. We are launching two Facebook campaigns to call on people to join the struggle and boycott Strauss products. In my opinion, the boycott is already starting to work.

We will soon recommend buying alternative products to those of Strauss, and we will publish a list of demands of Strauss Israel that Israel is Dear to Us is formulating.

For its part, Strauss has declared that it will not lower its prices. Strauss has already cut prices of about 50 products. We are taking the contract workers at our factories onto the payroll, and dealing with low income levels. Social justice is not just lower prices; it also means concern for the workers, their living and their welfare.

Asked why Strauss will not disclose its gross profit margin in Israel, which would indicate the profitability of its products, Balas answered, Strauss is a public company. Its financial statements are transparent and open, thus signaling that the company will not reveal the figures any time soon.

A representative of the consumer protest movement said in response: Strauss is embarrassing itself time after time with a string of excuses. The problem is not the price of Pesek Zman or any other chocolate. What are their excuses for the high prices of cocoa, of coffee, of Danone yogurt, of Milki desserts?

The problem is the high prices of the companys products in general. The public is demanding a significant cut in prices across the board, and is fed up of the hypocrisy when they use the workers as a bargaining chip. There must be a cut in prices in Israel too.

Strauss has to understand that boosting exports and establishing its hold in international markets cannot be done on the back of the Israeli consumer.

Published by Globes [online], Israel business news - - on February 22, 2012

Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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