Cottage Cheese Revolution "Watershed In The Economic Life Of Israel"

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Hebrew U. economist comments at university press briefing on cottage cheese scandal

Jerusalem, July 11, 2011 - The cottage cheese revolution is a "watershed in the economic life of Cottage cheese bowlIsrael", insisted Hebrew University economist Dr. Avi Simhon at a press briefing held today by the Hebrew University's department of media relations on the recent cottage cheese scandal in Israel.

The briefing, which featured three of the University's experts, examined the 40 percent price jump of cottage over the past three years, price rises in Israel, the monopoly in the dairy industry, why this particular incident over cottage cheese has Israelis up in arms, and how social media has been driving consumer protest.

"Such a wide campaign against a product has never happened before," said Prof. Yakir Plessner of the department of agricultural economics and management at the Robert H. Smith Faculty of Agriculture, Food and Science. Although he added that he was a bit surprised at the campaign as the weight of milk products in the consumer basket is relatively small – about 2.5 percent, and that even a serious reduction in all milk products would be barely felt by consumers. He added that the change in price of gasoline is probably more important than the price of cottage cheese.

"I’m not exaggerating to say that I’m thrilled about this cottage cheese revolution," said Dr. Avi Simhon of the department of agricultural economics and management at the Robert H. Smith Faculty of Agriculture, Food and Science. "This is a watershed in the economic life of Israel."

"Because we are a small country, we are surrounded by cartels, monopolies and non-competitive behavior by producers. Cottage cheese is not an insignificant product - it totals over 1 billion shekels a year. The producers of the other cartels have learned a great lesson now. They have learned they can't squeeze the consumer. This is an important lesson that will have a very large affect on the Israeli economy."

While the rise in gasoline prices is due to rising oil prices and increased government taxes, which go back to the public, Simhon commented that the money from the increased cost of cottage cheese prices is just going to "greedy producers that pocket it". He questioned whether the current boycott against cottage cheese will deter cellular companies from increasing their prices.

Commenting on the Facebook campaign to boycott cottage cheese, Dr. Paul Frosh of the department of communication and journalism said that this is only a very small part of story, and that most people were hearing about the campaign through the mass media.

However, he cited the case of Ynet posting a link to the Facebook campaign on the day that it was launched as proof that there was a symbiotic relationship between Ynet and Facebook and that mass media and social media do not compete, rather they collaborate.

On this new type of campaigning, he said, "Clicking a button on a website is now a kind of political action that can be seen, counted and reported by mass media. [It is a] form of visible political action in the way that attending a demonstration is a form of political action."

He added that this type of campaigning through social media networks is "low energy" and doesn't require huge amounts of commitment.

"Not buying cottage for a month is not a huge decision to make. When you ring those clicks together, you can create large political waves. This is perhaps a new kind of political force in societies that are highly mediated."

Another reason he gave for the success of this campaign is due to the fact that cottage cheese is perceived as a national symbol in Israel.

Plessner concluded by saying, "I am all for regulation of Tnuva and to make sure Tnuva does not make excessive profits."

However, he also added that he didn't want the government to intervene directly in the price mechanism.

"I always used to view the Israeli consumer as a dumb consumer. But in recent years, I think the Israeli consumer has become more sophisticated."

However, despite the high level in consumer dissatisfaction over rising prices, Plessner conceded that the happiness index should be taken into account also. "Over 80 percent of Israelis say they’re happy, so something must be right."

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