Gov’t Backs Down on Duty-Free Meat Imports

An ambitious plan to significantly increase the importation of duty-free fresh meat has been shelved for the time being, the Finance Ministry announced. The increase in duty-free imports that was supposed to begin in 2017 will be postponed until at least 2020, officials announced. Instead of the 17,500 tons of meat that was to be imported in 2017, only 2,500 will be allowed in tax-free.

A report in Globes attributed the policy change to a threat by Tnuva, the large Israeli food producer, to close down its Adom Adom meat processing plant in Beit She’an. Fearing that hundreds of workers could be let go, the Ministry decided to back down from its plan. In addition to drastically reducing the amount of duty-free meat imports, the Treasury will also allow Tnuva to import meat as well – a move that was sharply opposed by the Antitrust Authority, which has been seeking to increase competition against Tnuva’s domination of the fresh meat market.

Also favoring shelving the plan is the Agriculture Association, which represents 460 farms that grow 140,000 heads of cattle. Several weeks ago, it was reported that the government had signed an agreement with farmers to compensate them over the competition they will face from the importation of meat from abroad, but some growers have complained that the compensation is not sufficient.

The Treasury had been hoping to implement the import changes in order to impact the cost of fresh meat by increasing competition. The 17,500 tons of fresh meat that was to be imported duty-free represents about 87 percent of the annual amount of kosher meat consumed in Israel. According to the original plan, the market for imported meat was to be wide open within two years, with customs duty suspended on nearly all fresh meat entering the country.

While opening up the relatively small Israeli market to sources from throughout Europe and elsewhere sounds like it could be risky for Israeli meat producers, the objective appears to be to replace the current frozen meat supplies with higher-quality fresh meat. Over the past few years, Agriculture Ministry policies have largely eliminated the market for frozen poultry, which at one time was the mainstay of the Israeli poultry market, and has been replaced by large supplies of higher-quality fresh poultry.