The cottage cheese boycott ( he, מחאת הקוטג' or ) was an Israeli
consumer boycott
A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. T ...
which began in June 2011 using
Facebook
Facebook is an online social media and social networking service owned by American company Meta Platforms. Founded in 2004 by Mark Zuckerberg with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin M ...
. The protest was against the continuing rise of
food prices
Food prices refer to the average price level for food across countries, regions and on a global scale. Food prices have an impact on producers and consumers of food.
Price levels depend on the food production process, including food marketing an ...
in Israel. The organizers called on the public to stop buying
cottage cheese
Cottage cheese is a curdled milk product with a mild flavor and a creamy, non-homogeneous, soupy texture. It is made from skimmed milk by draining the cheese, as opposed to pressing it to make cheese curd—retaining some of the whey and keeping ...
, which is perceived as a basic food item in Israel. Within a short time, 100,000 users joined the Facebook protest page. As the boycott gained momentum, it sparked a public debate on the high cost of living in Israel.
Despite special sales campaigns designed to tempt shoppers, supermarket chains reported a sharp drop in the purchase of cottage cheese by Israel's three leading dairies, and the price of cottage cheese in the country was lowered.
History
Cottage cheese
Cottage cheese is a curdled milk product with a mild flavor and a creamy, non-homogeneous, soupy texture. It is made from skimmed milk by draining the cheese, as opposed to pressing it to make cheese curd—retaining some of the whey and keeping ...
is a popular commodity in Israel which is widely perceived as a basic food item by the
Israeli public. The
Tnuva
Tnuva, or Tenuvah, ( he, תנובה, ''fruit'' or ''produce'') is an Israeli food creation and marketing company. The company holds in Israel a significant market share in the field of drinking milk production, dairy products and its marketing. I ...
cooperative controls more than 70% of the dairy market, while the companies
Strauss
Strauss, Strauß or Straus is a common Germanic surname. Outside Germany and Austria ''Strauß'' is always spelled ''Strauss'' (the letter " ß" is not used in the German-speaking part of Switzerland). In classical music, "Strauss" usually ref ...
and
Tara control the rest of the market. In addition, importation of dairy products into Israel before the boycott was minimal due to the extremely high import duties imposed on them, with duties for some dairy imports standing over 100%. Due to Tnuva's dominance of the Israeli dairy market, it is considered a legal
monopoly
A monopoly (from Greek language, Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situati ...
by the Israel Antitrust Authority, which has the power to regulate its prices to prevent it from
price gouging
Price gouging is a pejorative term used to describe the situation when a seller increases the prices of goods, services, or commodities to a level much higher than is considered reasonable or fair. Usually, this event occurs after a demand or ...
.
In August 2008, Israeli Finance Minister
Avraham Hirschson
Avraham Hirschson ( he, אברהם הירשזון; 11 February 1941 – 7 March 2022) was an Israeli politician. He served as a member of the Knesset for Likud and Kadima between 1981 and 1984, and again from 1992 until 2009. He also held the po ...
declared that the government would stop regulating the price of
cottage cheese
Cottage cheese is a curdled milk product with a mild flavor and a creamy, non-homogeneous, soupy texture. It is made from skimmed milk by draining the cheese, as opposed to pressing it to make cheese curd—retaining some of the whey and keeping ...
, which stood at 4.82
NIS
Nis, Niš, NiS or NIS may refer to:
Places
* Niš, a city in Serbia
* Nis, Iran, a village
* Ness, Lewis ( gd, Nis, links=no), a village in the Outer Hebrides islands
Businesses and organizations
* Naftna Industrija Srbije, Petroleum Industry of ...
for a 250 ml (9-
ounce
The ounce () is any of several different units of mass, weight or volume and is derived almost unchanged from the , an Ancient Roman units of measurement, Ancient Roman unit of measurement.
The #International avoirdupois ounce, avoirdupois ounce ...
) tub, in order to encourage competition in this market. Contrary to the expectations, within three years the price of cottage cheese rose by about 45% of the original price, up to approximately 8 NIS.
According to the Israeli financial newspaper ''
Globes
A globe is a spherical model of Earth, of some other celestial body, or of the celestial sphere. Globes serve purposes similar to maps, but unlike maps, they do not distort the surface that they portray except to scale it down. A model globe of ...
'', the price hike that lead to the boycott was imposed due to a demand on Tnuva's executives by British
Apax Partners
Apax Partners LLP is a British private equity firm, headquartered in London, England. The company also operates out of six other offices in New York, Hong Kong, Mumbai, Tel Aviv, Munich and Shanghai. As of December 2017, the firm, including its ...
, a London-based private equity fund that had bought a controlling interest in the Israeli Tnuva, to raise the company's value. After Tnuva had been acquired by Apax, its executives were ordered to present a 100-day plan to increase the company's value, which was nicknamed "Quick Wins", in accordance with Apax's policy of purchasing companies, increase their value, and selling them within six years. Apax then hired
McKinsey & Company
McKinsey & Company is a global management consulting firm founded in 1926 by University of Chicago professor James O. McKinsey, that offers professional services to corporations, governments, and other organizations. McKinsey is the oldest and ...
, an American consulting firm, to examine Tnuva's pricing capabilities. McKinsey, along with Dr. Shula Pesach (Tnuva's head economist) conducted a study, and concluded that Tnuva could increase prices by at least 15% without harming public demand, although Dr. Pesach warned that the price hike had the potential to "blow up in the company's face". Sources in Tnuva told ''Globes'' that "Even before the rise in raw milk inputs, it was clear that Tnuva was going to continuously raise prices."
The protest
Following a series of articles by Ilanit Chaim in ''
Globes
A globe is a spherical model of Earth, of some other celestial body, or of the celestial sphere. Globes serve purposes similar to maps, but unlike maps, they do not distort the surface that they portray except to scale it down. A model globe of ...
'' which covered the surge in food prices and cost of living in Israel, in June 2011,
Bnei Brak
Bnei Brak or Bene Beraq ( he, בְּנֵי בְּרַק ) is a city located on the central Mediterranean Sea, Mediterranean Israeli coastal plain, coastal plain in Israel, just east of Tel Aviv. A center of Haredi Judaism, Bnei Brak covers an are ...
resident Itzik Alrov opened a protest group on
Facebook
Facebook is an online social media and social networking service owned by American company Meta Platforms. Founded in 2004 by Mark Zuckerberg with fellow Harvard College students and roommates Eduardo Saverin, Andrew McCollum, Dustin M ...
calling the Israeli public to stop buying cottage cheese as a first step. Although the boycott was planned for July 1, 2011, there had been much publicity in the media. With tens of thousands of Facebook users joining the protest group, the total soon passed 100,000. As a result, the boycott was moved up to mid-June 2011. The public was urged to purchase cottage cheese only if it cost less than 5 NIS, and to boycott other dairy products as well.
In September 2011, a NIS 125 million
class action
A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member or members of that group. The class actio ...
lawsuit was filed against Tnuva, alleging that the company "abused its position to raise cottage cheese prices by more than 40% between 2006 and 2011". The Israel Antitrust Authority also opened an investigation into Tnuva over alleged abuse of monopoly power.
After the CEO (Zehavit Cohen) of the Israeli branch of Apax Partners announced that it would not lower the price of cottage cheese, other Facebook protest groups were established calling to boycott all of
Tnuva
Tnuva, or Tenuvah, ( he, תנובה, ''fruit'' or ''produce'') is an Israeli food creation and marketing company. The company holds in Israel a significant market share in the field of drinking milk production, dairy products and its marketing. I ...
's products.
Government response
As a result of the public protest, the opposition parties initiated a debate on the matter in the
Knesset
The Knesset ( he, הַכְּנֶסֶת ; "gathering" or "assembly") is the unicameral legislature of Israel. As the supreme state body, the Knesset is sovereign and thus has complete control of the entirety of the Israeli government (with ...
. Finance Minister
Yuval Steinitz
Yuval Steinitz ( he, יוּבַל שְׁטַיְינִיץ; born 10 April 1958) is an Israeli politician who currently serves as a member of the Knesset for the Likud party. He also held several ministerial posts, including Minister of Finance, ...
and Prime Minister
Benjamin Netanyahu
Benjamin "Bibi" Netanyahu (; ; born 21 October 1949) is an Israeli politician who served as the ninth prime minister of Israel from 1996 to 1999 and again from 2009 to 2021. He is currently serving as Leader of the Opposition and Chairman of ...
announced that they would consider importing
dairy products
Dairy products or milk products, also known as lacticinia, are Food product, food products made from (or containing) milk. The most common dairy animals are cow, water buffalo, dairy goat, nanny goat, and Sheep, ewe. Dairy products include commo ...
to create competition in the Israeli dairy market. In addition, the Israeli minister of finance announced that the price of dairy products, which is regulated by the government, would continue to be regulated.
State Comptroller Micha Lindenstrauss
Micha Lindenstrauss ( he, מיכה לינדנשטראוס) (28 June 1937 – 2 May 2019) was an Israeli judge and the State Comptroller between 2005 and 2012.
Biography
Micha Lindenstrauss was born in Berlin, Germany. His family immigrated to Ma ...
announced that he would investigate the rising cost of dairy products. Knesset Speaker
Reuven Rivlin
Reuven "Ruvi" Rivlin ( he, רְאוּבֵן "רוּבִי" רִיבְלִין ; born 9 September 1939) is an Israeli politician and lawyer who served as the tenth president of Israel between 2014 and 2021. He is a member of the Likud party. Riv ...
attacked the
Tnuva
Tnuva, or Tenuvah, ( he, תנובה, ''fruit'' or ''produce'') is an Israeli food creation and marketing company. The company holds in Israel a significant market share in the field of drinking milk production, dairy products and its marketing. I ...
cooperative when he stated "You purchase a domestic product, but the money goes abroad."
The Kadmi Committee appointed to study the issue found that the margin of retail chains was the main cause for the price rises, followed by the margin of the large dairy manufacturers. Israeli dairy farmers were the least to blame. Following the recommendations of the committee, the Minister of Finance signed a bill to reduce customs on the import of hard cheeses. The Israeli dairy farmers, which considered themselves to sustain the most damage from the implementation of the new reduced customs bill, began protesting against it. In February 2014, Israeli Economy Minister
Naftali Bennett
Naftali Bennett ( he, נַפְתָּלִי בֶּנֶט, Transliterated: , ; born 25 March 1972) is an Israeli politician who served as the 13th prime minister of Israel from 13 June 2021 to 30 June 2022, and as the 3rd Alternate Prime Minist ...
lowered import duties on a variety of dairy products such as butter and yogurt by 80%, although these reduced tariffs came with quotas to help small Israeli companies increase their share in the market and encourage competition.
[
On December 30, 2013, the Israeli government imposed price controls on Tnuva, forcing the prices of dairy products to go down by about 20%. This decision had been preceded by an investigation of the market by an accountant hired by the government, which found that Tnuva's prices were "excessive and unreasonable".
]
Response of chain stores and dairies
The Israeli retail chain stores reported that sales dropped dramatically following the cottage protest and as a result several retail chains announced that they would significantly reduce the retail price of cottage cheese and cream cheese.
After many days in which the milk cooperatives kept silent, Ofra Strauss, Chairperson of Strauss Group, stated: "We were wrong. The cost of food is too high" and added that "the difference between high-tech and consumer products is that we cannot ignore what is happening to people". The next day, Zehavit Cohen, CEO of Tnuva, announced that Tnuva would not raise the price of dairy products until the end of the year, but it would not lower the price either. Five days later, Tnuva caved in and lowered the prices by about 12.5%, to 5.90 NIS per carton. The protest organizers claimed that the price was still too high and the boycott would continue until it dropped to 5 NIS. Shortly thereafter, all milk cooperatives announced that they would lower cottage cheese prices. The "Blue Square" supermarkets network, which operates the "Mega" supermarket chain, announced a 10 percent cut in basic commodities. The Shufersal
Shufersal ( he, שופרסל), formerly Super-Sol in English and Shufra-Sal in Hebrew, commonly known as Super-sal, is the largest supermarket chain in Israel, with a 20% market share (as of 2018). The company, which was established in 1958, was ...
supermarket chain announced that it would sell cottage cheese for 5.9 NIS.
Due to the cottage cheese protests, two other Israeli companies, Soglowek and Osem, said they would suspend planned price increases for their products.
Research
Hendel, Lach and Spiegel (2017) studied the cottage boycott econometrically. They find that (i) demand for cottage cheese dropped by 30% because of the boycott; (ii) brand loyalty diminished, and customers become more price sensitive and willing to substitute across brands; and (iii) the increase in prices sensitivity was more pronounced in areas with more usage of social media; this findings suggests that social media played an important role in facilitating consumer mobilization; and (iv) post‐boycott prices were substantially below the profit maximizing levels (as implied by the post‐boycott demand elasticities), suggesting that firms restrained their pricing policies, most likely because they were concerned with the boycott spreading to other products and with the increased likelihood of government intervention due to high prices.
See also
* Israel Dairy Board
*2011 Israeli housing protests
The 2011 Israeli social justice protests ( he, מְחָאַת צֶדֶק חֶבְרָתִי), which are also referred to by various other names in the media, were a series of demonstrations in Israel beginning in July 2011 involving hundreds of ...
*Olim L'Berlin
''Olim L'Berlin'' (Hebrew: , lit. "Let's Ascend to Berlin" but more accurately "Let's Move to Berlin," also known as the Milky protest) was the name of a Facebook page that coined a snowclone in 2014, and was terminated in early 2015. Comparing th ...
*List of protests in the 21st century
This is a list of protests in the 21st century.
Revolutions and uprisings Plants (Colour) revolutions
* Rose Revolution (Georgia, 2003)
* Tulip Revolution (Kyrgyzstan, 2005)
* Cedar Revolution (Lebanon, 2005)
* Orange Revolution (Ukraine, 2 ...
References
Literature
* Yossi Spiegel. Antitrust Enforcement of the Prohibition of Excessive Prices: The Israeli Experience. 3.3. The Cottage Cheese Class Action Case // Excessive Pricing and Competition Law Enforcement / eds. Yannis Katsoulacos, Frédéric Jenny. — Cham: Springer International Publishing, 2018. — P. 127–158. — . — DOI:10.1007/978-3-319-92831-9 5.
* Shay Hershkovitz. “Not Buying Cottage Cheese”: Motivations for Consumer Protest — the Case of the 2011 Protest in Israel // Journal of Consumer Policy. — 2017. — December (vol. 40, iss. 4). — P. 473–484. — ISSN 0168-7034. — DOI:10.1007/s10603-017-9340-5.
* Hendel, I., Lach, S. and Spiegel, Y. (2017), Consumers' activism: the cottage cheese boycott. The RAND Journal of Economics, 48: 972-1003. - DOI:10.1111/1756-2171.12212.
Further reading
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External links
*
{{Anti-government protests in Israel
Protest tactics
Protests in Israel
2011 in Israel
Consumer boycotts
Cottage cheese boycott The cottage cheese boycott ( he, מחאת הקוטג' or ) was an Israeli consumer boycott which began in June 2011 using Facebook. The protest was against the continuing rise of food prices in Israel. The organizers called on the public to stop buy ...
Pricing controversies
Boycott
A boycott is an act of nonviolent, voluntary abstention from a product, person, organization, or country as an expression of protest. It is usually for moral, social, political, or environmental reasons. The purpose of a boycott is to inflict som ...