Israel Meat marked newly structured
In return, cattle and sheep growers are to get some 250 mill. shekels ($66.5 mill.) in direct aid from the government over the eight years the new regime is in effect.
“The two companies not only control supply, but also the production chain, slaughtering and vacuum packing for retailers,” said a government source who asked not to be identified. “Opening up imports will cause the market to no longer be controlled by two players who set the prices, the level of supply and are able to threaten cattlemen who won’t sell at the price they want – there was no one else to slaughter their cattle.”
The government estimates that Israelis consume some 20,000 tons of meat every year, not counting institutional sales to places like hotels. Dabbah is estimated to control 54% of the market and Tnuva about 23%.
The newly structured market should allow more importers to enter the market, creating more competition that brings down prices. Consumers will also enjoy a wider selection of meats, including premium cuts from Argentina and Angus beef as well a Polish imports for the lower-priced segments of the market. Imports from Italy, Portugal and Spain are expected to follow. Agriculture Ministry officials hope that the growing import competition and wider selection will percolate down to the retail sector and increase competition there, too, bringing more savings to the consumer.
The agreement calls for duty-free imports to reach 7,500 tons this year and grow by 5,000 annually in 2017 and 2018 to a total of 17,500, accounting for nearly all the 20,000 tons imported every year right now. Meat imports that exceed the duty-free ceiling will enjoy lower tariffs. Today the rate is 12% plus 13 shekels a kilogram. The shekel portion will fall to 8.66 shekels this year, to 4.33 in 2018 and disappear in 2019. The 12% portion of the tax will eventually be reset in shekel terms.