Dairy Council to High Court: Cancel Duty on Milk Imports imposed by the finance minister

The Dairy Council has filed a petition with the High Court challenging the recent decision made by Finance Minister Bezalel Smotrich to cancel the duty on milk imports for a period of three months. The Council is seeking an injunction against the move or, alternatively, an urgent discussion on the issue of canceling the duty on milk, which would allow for the import of milk into Israel for the first time.

Represented by their attorney, the council argues that this decision violates the agreement signed between the ministers of agriculture and finance and the dairy farmers. According to the agreement, the duty was supposed to be reduced on various dairy products such as yogurt, hard cheeses, and yellow cheeses, but drinking milk was not included.

The Dairy Council and the Farmers dispute the Finance Minister's claims, stating that there is no actual shortage of milk production capacity in the country. They argue that the decision is based on inaccurate data provided by the Minister of Finance.

Moreover, the council asserts that the order is disproportionate as it permits the importation of all types of milk with up to 6% fat content, including enriched milk, goat milk, and sheep milk. These types of milk are not subject to monitoring, and there is no shortage of them in Israel.

The dairy industry raises concerns that after the three-month period, if a permanent order to import milk is issued, importers may prefer to import unsupervised types of milk that offer higher profitability. They argue that this could pose a threat to the regular supervised milk, which yields lower profits.

It appears that Rami Levy, a prominent importer, intends to be among the first to import milk if the order goes into effect. Levy plans to import milk from Poland by the end of the month, accompanying it with Israeli kosher milk and selling it at a cheaper price than regulated milk prices. The milk producer is a Polish dairy that already supplies Rami Levy with yellow cheese imported to Israel using kosher milk.

The petition is supported by the Minister of Agriculture, Avi Dichter, who strongly opposes the order. In a letter attached to the petition, Dichter expresses his astonishment at the Finance Minister's decision, stating that no arrangements were made with him or the relevant consulting bodies, despite his responsibility for the dairy industry. Dichter urges the Minister of Finance to reconsider this decision, which he believes will disproportionately harm the dairy industry, particularly in the periphery and settlements.

Dichter further claims that the issue lies not with production capacity in dairies but rather with other failures, particularly in the arrangements between dairies and marketing chains. He asserts that there is no problem in the supply of raw milk to the dairies and that allowing milk imports will damage small dairies with no bargaining power against marketing chains.

The order issued by the Finance Minister is seen as a gross violation of several agreements, including the most recent one signed on June 23, 2028. This agreement regulated controlled prices, target prices, and the promotion of efficiency in dairy farms through an automatic mechanism for updating prices.

The Minister of Agriculture emphasizes that each liter of imported milk will directly lead to a decrease in production, causing significant harm to farmers in the periphery, particularly in the Golan Heights. Dichter suggests that the solution lies in supporting permanent and regular local production to meet consumer demand, in accordance with the Dairy Farm Planning Law, which prioritizes the marketing of milk and dairy products from local sources in Israel.