New York’s Senator Charles Schumer is seeking to get the Israeli government to lower its tariff on grape juice – in order to enable Kedem, one of the largest producers of kosher grape juice in the world, to export more grape juice to Israel. According to Schumer, Israel is “not being fair,” because the US allows Israeli grape juice into the US tax-free.
New York State is one of the world’s foremost growing areas for concord grapes, the kind that go into grape juice, grape jelly, and sweet wines. Welch’s, which produces juice and jelly, is the world’s biggest concord grape customer, and Kedem is second, according to the company.
This year, there was a bumper crop of concord grapes, and concerned farmers in upstate New York met with Schumer, seeking help in selling more grapes to producers. Schumer, for his part, told the farmers that he has been seeking to get Israel to eliminate its tariff on grape juice, as well as increase the amount Israel allows into the country.
Israel currently imposes a 22% tariff on grape juice, and limits imports of bottled grape juice to 100,000 liters per year. Schumer said he believed Kedem could double its exports to Israel if the restrictions were lifted or eased.
In the past, the tariff on grape juice imports was over 100%, but was reduced to 22% several years ago. According to Economy Ministry officials, one reason for leaving the tariff intact is to ensure that Israeli grape producers, who generally do not receive subsidies as American growers do, can compete fairly.
PM: remove import duties
Earlier Sunday, Prime Minister Binyamin Netanyahu said that one of the keys to solving the “price crisis” in Israel was to remove import duties on many kinds of imported food products. Doing so, he said, would increase competition and force Israeli food manufacturers to make do with less profit.
Israel has relatively high import duties on many manufactured food products; in addition, the country significantly limits the amount and kind of products that can be imported. These limitations were imposed to protect Israeli growers and producers, in order to ensure that the country was able to remain self-sufficient and not become dependent on imported food.
However, the limits on imports have given many large food producers who dominate the market in specific areas license to keep prices artificially high – because they have no significant competition, according to many economists. Netanyahu has apparently adopted this point of view, as this is now the first time he has made a statement on an issue that has for years been a matter of sharp debate in the Knesset and among ministers.
Although Netanyahu did not put forth a comprehensive plan, economists said that he would likely adopt the European model of market competition on food products – allowing the more or less free import of products, while subsidizing Israeli companies subjected to lower prices that are likely to ensue from the “dumping” of products foreign companies are expected to engage in in order to build up market share.
