International activity

13 July, 2007
Page 12 
Israel faces a bread crisis, as bakeries have stopped producing government-subsidised, price-controlled bread.
Unless the government allows them to put up the price of the subsidised bread, bakers will not be able to afford to make it because of the price hikes in worldwide wheat.Last week, the government refused to raise bread prices, and so bakery owners halted price-controlled bread production, which accounts for about a fifth of the bread made in Israel. This comes at a time when mills have raised flour prices by 35-40%.Israeli media reports said that the bakeries were still continuing to produce more expensive varieties of bread, which are not price-controlled.Owners were demanding that the government put up the price of price-controlled bread by 12.5%, although experts say that it would take 30% to offset the increases. The government said it understood why the protests were taking place but urged bakers to keep producing subsidised bread because it was harming the poor and those with larger families. A committee, including the representatives of the Prime Minister's Office, the Finance Ministry and the Ministry of Industry, Trade and Employment, gathered to discuss the possibility of compensating those families who were worst hit.The Minister of Industry, Trade and Employment, Eliyahu Yishai, is to meet with representatives of the major bakeries in an effort to persuade them to resume baking the price-controlled breads, including white, dark and challah.



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