The tax on imported dairy products — including milk, butter, cream, and yogurt — will be reduced by 80 percent in the coming days, Israeli Radio reported Wednesday.
The Economy Ministry’s move will cut the price of many dairy products nearly by half, as they are currently taxed at 100%.
The price of dairy products jumped in October 2012, when Tnuva, Israel’s largest manufacturer of dairy foodstuffs, announced a 2 percent to 3.5 percent rise in consumer prices following a 9 percent increase in the cost of unpasteurized milk, the main basic ingredient of dairy products.
The Finance Ministry warned the Israeli Dairy Board in September 2012 that it would open the market to competition by permitting the import of dairy products to Israel.
The measure was part of a ministry effort to formulate an alternative plan after negotiations with the Dairy Board failed.
The plan included a substantial reduction in customs rates, and an increase in import quotas, including those for milk powder.
Times of Israel staff contributed to this report.