Importers blame high cost of food on gov’t taxes

By NADAV SHEMER
July 12, 2011 00:02

Participants at a meeting in Tel Aviv call on the government to open up the market to imports.

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Money Shekels bills 521. (photo credit: Courtesy)

Excessive taxation is the reason Israeli consumers pay a high price for their food products, food importers said Monday. Participants at a meeting in Tel Aviv, which was hosted by the Federation of Israeli Chambers of Commerce, called on the government to open up the market to imports.

Willifood co-CEO Yossi Williger presented canned tuna and sardines as examples of products for which Israeli’s were paying too much, due to what he called excessive import taxes. History shows that opening up specific markets to imports brings down prices, he said, adding: “Since the pasta market was opened to unrestricted importations, the competition has grown and pasta prices have dropped dramatically, to the joy of consumers.”

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Canned fish, Williger said, “is sold around the world at a cost of 30 to 40 percent less than in it is in Israel.

A basic comparison shows that the average price of a can of tuna costs NIS 5.5 in Israel, while an equivalent can of tuna is sold at $1.10 in England [NIS 3.80] and only $1 [NIS 3.45] in the United States.”

According to Ido Hamama of Hamama Meir Trading, which imports rice, coffee and dried fruits, when stamp duties were imposed 20 years ago, the proceeds for farmers were fundamentally different from today, when they benefit from new technology and their profits are higher.

“Today the dividends on specific products have risen tenfold, and there is no longer a reason to protect them with old and excessive taxes,” he said.

Hamama said the import duty on chickpeas is NIS 1,100 per ton, which adds 30% to the shelf price, while the duty on peanuts is NIS 3,100 per ton, adding an additional 50% to the cost.

“Weak government policy” had brought about the price rise, Chambers of Commerce President Uriel Lynn said. He recommended that protectionist duties on the importation of various food products be dropped, including: 190% tax on fresh beef; 170% tax on chicken meat; 153% tax on milk and dairy cream; and 140% tax on butter.

Lynn also said removing the Value Added Tax on these same products would not have the same desired result because it would only lead to calls for other products to be exempted from VAT.


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