Israel milk war sours outlook for Palestinian companies
Ban of West Bank products is poorly covered Israeli push to claim East Jerusalem market share, but for hundreds of Palestine’s workers it means much more
SAWAHREH, WEST BANK // A lanky young Palestinian man wearing a blue plastic hair covering is hard at work, placing containers of strawberry yogurt into cartons and packing them in preparation for distribution. His work at Hamoda Company for Food and Dairy Products may be tedious but at least it is work – nothing to take for granted in the West Bank, where unemployment is near 20 per cent.
But the man’s job is in danger, says Hazem Mashaqi, Hamoda’s quality assurance director. So are the jobs of many of the 110 other workers at the plant in Sawahreh village after Israel last month banned imports of its dairy products into East Jerusalem.
Hamoda sells milk, yogurt, cheese, labneh and salads in East Jerusalem, which accounts for almost 50 per cent of the company’s sales, says executive manager Mohammad Al Sous.
“If the ban is not ended it will cost many jobs – maybe mine, I can’t guess,” says Mr Mashaqi. He says Hamoda is running promotions with discounts in the West Bank to try to make up lost revenue in East Jerusalem. Hamoda was one of six West Bank dairy and meat producers to have products turned back at the Beitunya checkpoint near Ramallah – the transit point for goods entering Israel – on March 9 when the ban started.
The other companies are dairy producers Al Rayan and Juneidi, and meat producers Siniora, Salwa and Ghoshe.
Israel says the Palestinian Authority has not given adequate assurances that the products meet health standards. It says it has given the PA chances to raise quality but it has failed to do so.
PA officials and company executives say the health fears are spurious and that Israel is trying to assert its claim to East Jerusalem, which it illegally annexed in 1967, and wants Israeli firms to take over the market share of Palestinian companies.
“They want to claim East Jerusalem as part of Israel’s capital,” says Tariq Abu Laban, director general for marketing at the PA ministry of agriculture.
“The facts are that those products before being allowed to enter East Jerusalem are inspected by the Israeli side. A sample of each shipment is taken by Israeli officials to the Israeli laboratory and is tested.
“They meet the standards and that’s why they’ve been allowed to enter” in the past.
On March 23, the PA hit back by banning five Israeli drink and meat companies’ products from being sold in the areas it controls. They are dairy producers Tnuva, Tera and Strauss, meat products from Soglowek and Tapuzina soft drinks.
The UN’s Food and Agriculture Organisation, which is gathering information on the dispute, says that Hamoda and other banned companies should be credited for working to raise their standards.
“Quite a significant amount of work has been done by Hamoda and other companies to close any gaps,” says Mischa Tripoli, an FAO economist who visited the Hamoda offices last Sunday.
To some Israelis the ban is misguided. Israel’s Coordinator of Government Activities in the Territories, Gen Yoav Mordechai, has voiced concern that dismissing workers could inflame the situation further in the West Bank. Gen Mordechai has been pressing the agriculture ministry to lift the ban, thus far without success, reports Haaretz newspaper.
A wave of violence that began last October has killed more than 200 Palestinians and 28 Israelis.
Israel claims most of the Palestinians killed had carried out, or were trying to carry out, attacks against Israelis, but Israeli forces have been accused of using excessive force in many cases.
Hamoda started as a very small operation in 1987. Its gross sales last year were 42 million shekels (Dh40.4m), Mr Al Sous says.
It has shipped its products to East Jerusalem for more than 25 years, except for one month in 2010 when Israel’s agriculture ministry stopped them, giving the same reason.
Palestinian officials say the shipments resumed only after intervention by the international community, including the Middle East peace quartet of the US, Russia, the European Union and the United Nations.
Until the latest ban, Hamoda was a success story amid the bleak overall Palestinian economic picture. Since 2011, it has had an average growth rate in sales of 14.5 per cent a year, Mr Al Sous says.
It increased its staff by 25 per cent in those five years, and added six new products including desserts, and spreadable and processed cheese.
Since the ban, it has reduced milk production by a third, Mr Al Sous says, and is bracing for reduction of other products and 42 staff lay-offs next month unless the ban is rescinded.
“If they ban our products in East Jerusalem, it means East Jerusalem will be flooded by Israeli products,” he says. “That’s the hard situation we cannot accept. You are a free person and you shouldn’t be forced in selections of your food.
“If they have any problem with the Palestinian veterinary service, then let the international community assist the veterinary service by building up its capacity so that it can complete the role.
“It’s not acceptable at all to stop things within one day, to cut the revenues of a company by 50 per cent overnight.”