In good news for importers but bad news for Israel’s dairies, Minister of Finance Israel Katz has decided to extend the exemption from import duty on butter. Katz announced yesterday that the exemption would be extended for a period of two years. “Imports will prevent the shortages that have happened in the past, and allow competition in dairy products by broadening the range of choice available to the consumer and reducing the cost of living,” Katz’s announcement said. The announcement comes against the background of a long period in which butter was scarce in Israel, a situation that was resolved by a temporary order opening the market to imports free of duty for the past year.
Katz’s decision goes against the stance of the dairy farmers and representatives of Israel’s dairy industry who tried to obtain a quota limiting the amount of butter exempt from duty to 6,500 tonnes, which they saw as fairer, rather than opening the market to imports completely.
The Israel Milk Producers Association (formerly the Israel Cattle Breeders Association) accused the Ministry of Finance of enriching a coterie of importers at the expense of weaker sections of Israeli society, and said that the decision would result in higher prices for butter, after prices had already risen considerably this year.
The Israel Dairy Board petitioned the High Court of Justice over the previous decision to open the butter market to imports, but the court declined to intervene, on the grounds that the measure was only temporary. The Dairy Board is now threatening to return to court, saying that the state has breached its undertaking that the measure would be for one year only, and in addition was allowing imported butter to be sold at above the regulated price.
Negotiations are currently taking place between the producers, the Ministry of Finance, and the Ministry of Agriculture on regulation of Israel’s dairy market. “This unilateral move was published at a time when negotiations are underway with the Ministry of Finance, and now the ministry’s true intentions have been exposed,” the Dairy Board said.
Published by Globes, Israel business news – en.globes.co.il – on November 19, 2020
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