Chicken cartel driving up prices in Israel ahead of Passover

The price of fresh chicken has spiked 20% since the summer; supermarkets blame chicken farmers, slaughterhouses - and the law.

By Adi Dovrat-Meseritz and Ora Coren for Haaretz

By coordinating production levels and reducing supply, farmers and slaughterhouses have been steadily pushing up the price of chicken for the past year and a half, according to supermarket chains.

“The farmers and the slaughterhouses, which often own [the farms], are running a cartel, which drove up prices by dozens of percentage points," said a senior executive at a major grocery store chain. "We need more competition over such a basic product.”

The chicken farmers don’t deny it — Israeli antitrust law actually allows farmers to coordinate prices and behave as a cartel. The farmers say they are just trying to avoid selling at a loss and blame the supermarkets for raising prices at consumers’ expense.

The price of fresh chicken has increased 20% since June 2012, and chicken breast prices are up 25%, according to data from the Central Bureau of Statistics. Prices are expected to jump another 10% by Passover, in two weeks, say supermarket sources, which would mark an all-time high.

In the past 10 years — since March 2004 — the price of fresh chicken has increased 27%, and chicken breast is up 30%.

Grocery store chains say that for the past two months, the slaughterhouses have been gradually raising prices and intend to keep doing so until the holiday.

“Over the past two weeks, all the slaughterhouses we work with called and said they’re raising prices by 5%. So far, we’ve managed to stop them. But I think the closer we come to the holiday, and demand increases, we won’t be able to fight and prices will increase by about 10%,” said an executive at a midsized grocery store chain. “Currently, we’re paying 16 shekels per kilo. By the holiday, it’ll definitely be at least 18 shekels.”

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