There is no need to be moved by the extraordinary gesture of the franchise owners of the Tali grapes brand. If you bought a kilogram of Tali grapes for NIS 10 instead of NIS 40, it's not because the farmers from Moshav Lachish care about you, but because they want to deal a blow to the competitors.
Tali grapes know the rules of the game very well and know that drastically lowering prices will do the job and may eliminate the other competitors. For many years, the grape growers in Moshav Lachish have not broken the bank and are marketing the grapes of the brand developed in the USA at high prices - and there is no one to stop them. Before the brand arrived in Israel, grapes of the "Thompson" variety were grown in Moshav Lachish, which flooded the markets and were sold under the name "Lachish Grapes". At prices ranging from NIS 5 to 10 per kg. For the sake of comparison, Tali grapes are currently sold for NIS 40 per kg.
At the time when "Thompson" was a hit, there were many vineyards in the country and the markets were full of grapes that were not always sweet varieties. The entry of the Tali brand into the field changed the rules of the game. The Israelis immediately fell in love with the American variety, which quickly acclimatized in the local market, and the grape growers in Moshav Lakish took advantage of the opportunity to turn the new grape variety into boutique grapes, which are mainly bought by high income earners.
A rare breed
To purchase brands you have to pay, and a lot. Tali is a strong brand, which includes nearly 70 growers and has managed to maintain a high and uniform price level for many years. This fact did not go unnoticed by growers and importers, who decided to compete with the brand. They imported grapes to Israel and started a competition.
The first shipments of grapes that arrived in Israel, especially during the winter season, lit a red light in Moshav Lakish. The producers of the old brand, who were used to making millions, followed importers and local growers with interest, and when they realized that for the first time they could lose a lot of money - they did not remain indifferent.
In the first step, they went back to airing the well-known advertisement broadcasts of Tali grapes on television. And when they came to the conclusion that the competitors were tailing them, they decided to hit them in a big way. There is no method to subjugate competitors like breaking a market. And when it comes to a product that is an agricultural crop like grapes, it can be done more easily.
The cooling warehouses in Moshav Lachish are already loaded with tons of grapes, and a steep (even if temporary) price reduction of the product from NIS 40 to NIS 10 per kg was supposed to do the job, overwhelm the competitors and make the grape cultivation of the competing growers unprofitable.
Tali grapes are not a monopoly, because an agricultural association cannot be declared a monopoly, but they are an empire that grows more than 30 varieties of grapes. The brand is based on the fact that the grapes arrive considerably late to the markets out of a desire to market them in the months of September-October-November, when there are almost no other varieties on the market. The method of Tali grapes is based on supplying late grapes, from August to December, which gives them an advantage over the competitors.
The new competitors
It is too early to determine if the growers will also be caught up in a world war in the field of grape marketing. In recent weeks, alongside Tali grapes sold for NIS 10 per kg, baskets of grapes from local growers sold for more than NIS 35 per kg were displayed. At Tali they estimate that they will continue to dominate the market at brand prices as it was until recently. On the other hand, the new breeders intend to make an effort so that within a few years they will become a central factor that cannot be ignored.
And so five kibbutzim join the field: Hahotrim, Beit Oren, Mishmar Ha'emek, Sdot Yam and Ein Carmel, which through the cooperative association "Coast Bananas", one of the largest banana growers in the country, will create a competition for Tali grapes. The general director of Bananas of the Coast, Ertal Tobin, says that this year they harvested 400 hectares dunams of grapes, and next year they intend to harvest 500 hectares.
According to him, the new brand, called Arba Onot, also brought new "patent varieties" to Israel, which can be preserved throughout the season. One of the varieties, Sugar Crisp, is even expected to compete with the Autumn Crisp variety of Tali grapes. The grapes presented by the new brand will be of special varieties, and the assessment in four seasons is that the public will not be in a hurry to give them up.
Anyone who visits Europe cannot help but be impressed by the fact that the prices of the products sold there are half as cheap as the prices of the products in Israel. Even products that are manufactured in Israel and are on the shelves abroad are sometimes sold at half their price in Israel. Now the Ministry of Economy is asking to lower the prices and open the markets to competition in a way that will harm the big importers. It is not certain that the grape war is the beginning of a competition. What is clear is that we must try to break Moshav Lachish's control of grape marketing in Israel.
Lachish's winegrowers pocket millions of shekels, because other winegrowers have not been able to compete with them. The current competition is not real, and the prices of grapes in Israel must be equal for everyone. As long as there is only one grower that markets boutique grapes, there is no way we will be able to buy grapes at a discounted price in the future.