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Israel is lowering barriers to imports of hard cheese, Finance Minister Yuval Steinitz said yesterday, signing an order that reduces customs levies on the cheeses.

It was the first concrete step to opening Israel's dairy market after a boycott of cottage cheese over high prices sparked the present wave of social unrest.

"Exposing dairy to imports will stimulate competition and lower consumer prices," Steinitz said.

The level of customs duties on imports of hard cheese will gradually drop from 70% to 20% by 2016. In addition, the tax will be lowered to 20% in 2011 on a quota of 1,500 tons - which will gradually rise to 7,500 tons by 2015. The ministry said hard cheeses account for 20% of the domestic dairy industry's production.

During the gradual increase in imports, the Finance Ministry will observe the effect on the domestic dairy industry. Worry not about the state coffers: The ministry adds that since there had been practically no cheese imports until now, its loss of tax revenue (from reducing the customs levies ) will be negligible. The move is aimed at alleviating concerns about the high price of food and other basic products in Israel. It follows Sunday's cancellation of a planned 5% price hike on gasoline.

The Dairy Board was not pleased by the decision and yesterday filed a motion with the High Court of Justice, seeking to stay attempts at reform by the finance and industry, trade and labor ministries. The board announcement says that the committee whose findings lie behind yesterday's decision, which had been headed by Industry Ministry director-general Sharon Kedmi, had judged the dairy industry like a kangaroo court. The board also argues that the committee had failed in its duty to consult with the dairy industry.