The iconic Krembo, a chocolate-coated marshmallow treat meant to serve as a stand-in for ice cream during the winter, is again filling store shelves and kids’ bellies as temperatures turn chilly. But this year, the sweet dessert is coming with a bitter aftertaste.

Kicking off the winter season, the Krembos manufacturer hiked the price of the Mallomar lookalike by 9 percent, the latest in a series of price hikes for the gooey snack, meaning a pack of eight now costs NIS 22 ($7), up from some NIS 14 ($4.40) just five years ago. That’s despite a decline in the costs of sugar, cacao, flour and other raw materials.

Krembo is just one of many food items that have become more expensive for consumers in Israel, a trend that was supercharged during the two years of war following the Hamas attack on October 7, 2023, and that has continued since, contributing to the already sky-high cost of living.

The Strauss Group and other food manufactures have attributed recent price hikes to what they say are significant and ongoing increases in production costs, including for electricity, municipal property taxes, wages and raw materials.

But critics say the problem is weak consumer protections that give producers practical carte blanche to keep raising prices.

“Retail chains have been raising prices although the cost of many of the raw materials or inputs that go into the products have been falling, and that is a sign that we have a severe problem of market power and monopolies in the food sector,” Dror Strum, a former head of what was then called the Antitrust Authority, who now heads the Israeli Institute for Economic Planning, told The Times of Israel. “Manufacturers and retail chains in the food sector, both of which operate as monopolies, don’t have any fear of raising prices because who would move them off the shelf?”

According to Strum, as Israelis stocked up on emergency supplies amid the war, manufacturers took advantage of captive consumers by sending prices rocketing upward.

“Israelis were worrying that they would have enough food in their homes when missiles fly over them and not about paying a few shekels or even NIS 20 more when buying their groceries — they certainly exploited that hardship,” Strum noted.

Behind the wave of rising living costs were Israel’s largest food manufacturers, Tnuva, Strauss, and Osem-Nestlé, alongside the two main importers, Diplomat and Schestowitz.

Over the past three years, the cost of a shopping basket with 50 basic goods has increased by about 20%, or by about NIS 250 ($80) a month for a family with two kids, according to Strum’s IEP, an independent research institute.

Together with housing costs, steep food prices have been a main factor pushing families into deeper economic hardship. According to aid organization Latet, nearly 27% of Israeli families faced food insecurity in 2025, up from 21% a year earlier.

The organization found that a family of four needed to spend NIS 14,139 ($4,480) a month in 2025 to meet bare minimum needs, including NIS 3,797 ($1,190) on food alone, up from NIS 12,938 per month ($4,100) in 2023, of which NIS 3,496 ($1,107) went to food. A survey by the group found that the high costs were forcing many to make ends meet by purchasing less food.

According to grassroots advocacy group Lobby 99, food companies and manufacturers have “significantly raised prices” since the outbreak of fighting in October 2023, as the two-year war period diverted public and government attention away from the issue of the high cost of living in Israel.

A study conducted by Lobby 99 found that food suppliers and manufacturers hiked prices by an average of 10.1% since October 2023, led by Strauss which raised prices by almost 14%, followed by Tnuva at over 12%, and Osem-Nestlé at 13%.

“Food companies took advantage of this situation to raise prices in several waves, mainly citing the increase in the cost of raw materials,” said Lobby 99’s head of research, Ariel Paz-Sawicki.

The war has been halted since October 2025, but there remain concerns that........

© The Times of Israel