State Needs Fourth Big Dairy and Should Fund It, Say Food Experts

Fourth dairy would compete with the three big incumbents - Strauss, Tnuva and Tara.

Israel needs a fourth big dairy and the government should help one become established, a committee reviewing food prices will be recommending, say insiders.

The government assists only food manufacturers that export a large portion of their output.

The fourth dairy would compete with the three big incumbents - Strauss, Tnuva and Tara.

Two small dairies reportedly would like to apply: Gad, owned by Ezra Cohen, and Ramat Hagolan, owned by the kibbutzim. The Gad dairy is reportedly already looking for sites to expand, and has been considering land in the area of Kafr Qasem.

Industry Ministry sources said it was unlikely that either dairy could raise the hundreds of millions of shekels necessary to expand on its own.

But in any case, building a fourth large dairy will take time, so in the meanwhile, imports should be increased, the sources said.

The committee, headed by Industry Ministry Director General Sharon Kedmi, is expected to call for allowing imports to comprise 10% to 15% of the dairy market.

Next week, the committee is scheduled to hold a hearing for dairy farmers, who are likely to be hurt by such a move. The High Court of Justice had proposed that such a hearing be held after the farmers petitioned it against a separate committee examining the dairy market, which wrapped up its work several months ago.

Unlike the dairy committee, the food committee is not expected to recommend lowering the price that dairy farmers receive for their raw milk. The food committee is expected to submit its conclusions to the court by March 20.

The Industry Ministry commented that dairy prices are back at the highs they hit before the summer's protests, and that there is no evidence of competition among the major dairies.

Meanwhile, the treasury and the Industry Ministry are considering allowing imported goods to be sold at dumping prices, as long as they comprise no more than 25% to 30% of a given market.

Dumping means selling a product for less than its price in the country where it was produced. It is generally used as a means to fight competitors in the importing country, occasionally with the aim of pushing them out of the market and then raising prices.

However, it could also force local manufacturers to lower prices in order to compete with the imported goods.

The ministries believe this should be allowed so long as the imported goods have no more than a 25% to 30% share of a given market.

The Trajtenberg Committee on socioeconomic reform had originally recommended allowing dumping for up to 50% of a given market, but this drew opposition from both manufacturers and the Industry Ministry.