Cottage Cheese boycott sours Tnuva's bottom line

Dairy's 2011 net profit drops 17%; projected revenues for 2011 increase 5.6% to some NIS 7.64 billion

Naama Sikuler, Calcalist|Published: 02.28.12 , 07:50

Tnuva's projected revenue for 2011 are NIS 7.64 billion, which constitutes a 5.65% against the company's 2010 revenue, Calcalist learned Monday.

Despite the revenue growth, the aftermath of the Cottage Cheese protest is well evident in the dairy's results, with operational profits dropping 25% and the operational profit margin dropping from 9.8% in 2010 to 7% in 2011. Tnuva's projected net profit for 2011 is NIS 428 million slipping 17% against 2010.

Successful Boycott

Tnuva, Strauss drop cottage cheese price

Tani Goldstein

Food conglomerates to reduce price of container sold to retailers to NIS 4.55, allowing stores to offer product for up to NIS 5.90. Boycott initiator: Price still too high, protest will go on

Tnuva, Strauss drop cottage cheese price

The price hikes that led to the consumer boycott against the company are reflected in the company's results with the first six months of the year showing a 6.6% rise in sales and the second hald showing the decline in sales.

Tnuva's results were published on Monday as part of a valuation of the company by financial advisory firm Giza, Singer Even.

Giza also reviewed the steep price hike which made Tnuva the target of the consumer protest, saying: "During this period, the group raised the prices of some of its products without a concurrent production cost increase, allowing for higher gross profits and gross profit margins."

The valuation was based on the actual results of the three first quarters of 2011 and projected results for the fourth quarter of the year and was conducted ahead of the relisting of Mivtach Shamir, holder of 20.7% of Tnuva, on TASE.

The boycott against Tnuva led to a loss of 1.5% of its overall market stake in the third quarter of 2011, as compared with the first quarter.

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