Government agrees to limit rise in bread prices, end price controls by April 2023

Prime Minister Yair Lapid reached an agreement with Economy and Industry Minister Orna Barbivai to limit planned price hikes for bread.

According to a Monday statement from Lapid’s office, prices will rise gradually over the coming months but not reach a previously planned jump.

Under the agreement, the price supervising committee will raise the cost of common dark bread by 5 percent, sliced common dark bread by 5.5%, and challah by 8%.

There will be a further price hike for sliced common dark loaves and challah in December, up to a total of 30%.

The price of unsliced common dark bread will also be raised by 21% for three months, still less than the over 35% hike the pricing committee had originally planned, the statement said.

Ministers also decided that the government would end price controls on bread from April 2023.

Lapid called on the finance and welfare ministries to provide greater financing to programs that help those dealing with food insecurity.

The Standing Together social justice movement said in a statement that with prices rising, minimum wages should also go up.

“Price are rising, but our wages — not. After five years of stagnation, it is time to raise the minimum wage to NIS 40 ($11.5) an hour in order to help two million employees to close out the month.”

The price of other forms of white bread will remain the same.

Bread products with supervised, or limited, prices include sliced and unsliced white and dark loaves, as well as challah. A planned 20% price rise, which would have increased the cost of the common dark loaf bread from NIS 7.11 (approximately $2) to NIS 8.54 ($2.45), was set to go into effect on earlier this month. The hike was put on hold by major supermarkets following a request by Barbivai for a reprieve while negotiations continued to find an alternative.

The PMO has said the rise in bread price is a result of a global food crisis linked to Russia’s invasion of Ukraine, which is a major exporter of wheat.

According to the latest figures released by the Central Bureau of Statistics, Israel’s annual inflation rate stands at 4.4% as of June, the highest since 2008.

The CPI measures the average cost of household goods. Particular rises in June were seen in transport (2.4%), housing (0.7%), and culture and entertainment (0.7%).

However, a decrease of 8.5% was seen in the costs of fresh vegetables and fruits, and 3.4% in clothing and footwear during June, the data showed.

Outrage over the rising cost of living has been growing, a decade after Israel last saw widespread social unrest on the matter.