can of tuna 390 .
(photo credit: Thinkstock/Imagebank)
Having only recently waged the Cottage Cheese War (where, despite the hype, our
victory remains doubtful), few of us realize that we’re now in the throes of the
This time, the government is in the vanguard. In keeping with
its Trajtenberg undertakings, it aims to reduce import levies to lower the cost
of canned tuna, a common Israeli dietary staple – just like cottage cheese. The
plan has raised an outcry from local canners, who threaten to fire employees if
forced to face foreign competitors.
Anxious employees, fearing for their
livelihood, were sent to demonstrate in Tel Aviv last Thursday.
angst isn’t unfounded. In our globalized economic reality, there’s cogent
justification for claims that local industries are put at a disadvantage
vis-à-vis low-cost foreign imports. The competition with overseas manufacturers,
who pay meager wages, is regarded by beleaguered entrepreneurs as intrinsically
unfair. In their view – which shouldn’t be dismissed out of hand – there’s
nothing as indispensable as tariffs designed to even the scales between imports
and goods produced domestically.
This is important to keep in mind as
Israeli consumers decry the high cost of living and the fact that they’re forced
to pay excessively for what are basic items. These are conspicuously inexpensive
abroad, yet pricey here.
Part of the problem is that we’re told we must
shell out more of our hard-earned income to make it possible for more of our
compatriots to keep their jobs.
Our social solidarity is pitted against
our household budget. But is this dilemma unavoidable, or are we being cynically
manipulated? The Tuna War offers an instructive case in point.
five tuna canning operations in Israel, among them ostensibly foreign brands
like Starkist, which produces half of all the canned tuna marketed here. These
canneries are all in the periphery – Beersheba, Kiryat Malachi, Hatzor, Tirat
Hacarmel and Tira – employing nearly 1,300 workers. Their raison d’etre is
predicated on the fact that already processed tuna imported frozen in bulk is
untaxed. All that’s left to do is defrost and pack it. However, imported
already-canned tuna is taxed between 30% and 40%, a fact that shields domestic
canneries from competition.
IT WOULD be a shame to undermine growing
Israeli concerns. The question, however, is whether these are truly
viable concerns or are merely enterprises propped up artificially, via
protectionism – underpinned by the unofficial tax that high prices constitute.
Put simply, ordinary Israelis are required to carry these plants on their
This accentuates the predicament of whether charitable
considerations should override economic sense and, if so, whether in the long
run benevolent intentions justify themselves.
We’ve seen it all before in
the shape of textile and plastics factories that were set up in development
towns but couldn’t, over the decades, survive in a competitive
They only managed to exist in what became a subsidized
environment, and even then found it harder and harder to make a go of
Before us is seemingly a cruel choice between rendering more of the
least upwardly mobile Israelis redundant or paying fractionally more for given
products. The additional cost for each such product wouldn’t break the bank, but
when all such inordinate extra expenditures are combined, the standard of living
of too many Israelis is compromised, including Israelis who do not necessarily
earn more than cannery employees.
BUT THERE’S another factor in the
equation besides overpaying and job-protection. The industrialists aren’t
altruists. While fighting hard against lower customs duties, as is only to be
expected, they are also about to raise prices heftily. They had already put the
authorities on notice that each tuna can would soon cost us more by between 10%
and 15%, depending on the specific tuna type.
It’s in their obvious
interest to avoid a more competitive marketplace. But to justify that, the least
they can do is not charge us more, as this will surely increase popular pressure
Their excuse is hiked commodity prices, but an
industry that claims to be viable must absorb higher overheads or face
competition. It cannot have it both ways.