Finance Minister Avigdor Liberman, in coordination with Agriculture Minister Oded Forer, has signed an order that would abolish tariffs on soft dairy products, while increasing the duty-free quota for hard cheeses.
This move has been put into effect at the recommendation of the Organisation for Economic Co-operation and Development (OECD) and is expected to lower the prices of dairy products for Israeli consumers.
The order includes the complete abolition of customs on yogurts, dairy delicacies and cheeses with up to 5% fat. It will allow the market to open for free import of these products from European countries where the consumer price per kilogram of yogurt is, on average 8.5 NIS per kg., compared to 17 NIS per kg. in Israel.
The order also includes an increase in duty-free quotas of 5,000 tons for the import of cheeses, which are expected to be about 25% cheaper than the regulated price in Israel. As a result, the consumer price is expected to fall by about 10 NIS per kg., according to the Finance and Agriculture ministries.
“Free competition achieves three goals for us: a good price for the consumer, a larger selection of products and also requires the local market to improve,” said Forer.
He said the implementation of this order will positively impact the country’s agricultural industry: “This is another step in the reform we are leading to open the market and strengthen local agriculture.”
In a recent report from the Economist Intelligence Unit, Tel Aviv was crowned the world’s most expensive city to live in.
“Dairy products in Israel are 79% more expensive than the OECD average,” said Liberman. “Opening the dairy market to competition is the first step in a series of solutions to address the cost of living.”