Strauss Drops on Report It May Face Food Boycott: Tel Aviv Mover
Feb. 19 (Bloomberg) -- Strauss Group Ltd. declined to the lowest level in more than four months after Calcalist reported Israeli activists have written to the foodmaker threatening to boycott its products unless it lowers prices.
Shares of the Petach, Tikvah, Israel-based company dropped 3.5 percent to 44.18 shekels at the 4:30 p.m. close in Tel Aviv, the lowest level since Oct. 9. The benchmark TA-25 index gained 0.6 percent.
“Investors still remember the cottage cheese protests against Tnuva, and they are reacting to the threat,” Tsahi Avraham, an analyst at Clal Finance Brokerage Ltd. in Tel Aviv, said. “Even if what the activists say may not be completely accurate, in the end what counts is consumer perception.”
Last year, hundreds of thousands of people protested in the streets of Tel Aviv in a campaign triggered by a rise in the cost of cottage cheese. The move prodded closely held Tnuva Food Industries Agricultural Co-Op. In Israel Ltd., which controls about 70 percent of the dairy market, to cut its prices by as much as 15 percent.
Activists said Strauss sells products abroad for less than it does in Israel, Calcalist reported.
“As a response to the consumer protests, Strauss has lowered the prices on over 50 key products, including chocolate, coffee and milk products, by an average 10 percent,” Strauss said in an e-mailed statement today. The company recently lowered management salaries, it added.
“Social justice is not just about lowering prices but worrying about the continued existence of the company that pays the salaries of thousands of workers in the country,” it said. “The company will continue be attuned to its consumers.”
--Editors: Daliah Merzaban, Claudia Maedler
To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at firstname.lastname@example.org
To contact the editor responsible for this story: Claudia Maedler at email@example.com