Good news for Israeli food manufacturers: As of January 1, 2010, food products exported to Europe will enjoy tax exemptions. The products include chocolate, pastries, waffles, pasta, coffee, fruit juice concentrates, marshmallow, fresh salads, and more.
As a result, the prices of Israeli products in European markets could be reduced, increasing their competitiveness.
So far, the exports of Israeli processed foods have been exported to Europe under restrictions of high levies, preventing their exports in some cases.
The tax exemption was reached as part of a new agricultural trade agreement signed between Israel and the European Union. The new deal was signed last weekend in Brussels, in the presence of Israeli Ambassador to the EU Ran Curiel and the ambassador of Sweden, which is the current EU president.
This new situation could serve as compensation for Israeli manufacturers, like Strauss and Osem, in light of the recent weakness in the Israeli food and beverages market.
The European market is the main market the Israeli processed food industry trades with, as 50% of the food imports to Israel are from the European Union and 44% of the exports in this sector are directed to EU markets. The volume of exports to Europe is estimated today at around $650 million.
"The agreement is expected to bring about a liberalization of about 95% in the commerce in processed food between Israel and the European Union, and significantly increase the competitiveness of the Israeli food industry in exports to Europe," said Industry, Trade and Labor Minister Binyamin Ben-Eliezer.