Grape juice wars?

Prices too high? Let Israelis drink grape juice – NY Senator

New York has too many grapes, Israelis pay too much for their Friday night wine. It’s a match made in the vineyard, says Sen. Schumer

Children make kiddush at a model Passover seder (Nati Shohat/Flash90)
Children make kiddush at a model Passover seder (Nati Shohat/Flash90)

Although most can’t vote for him, New York Senator Charles Schumer has got Israelis’ back – fighting to lower prices on at least one product. In this case, what’s good for most Israelis is good for New York State grape growers — though local vineyard owners probably wouldn’t go along with that.

Schumer announced last month that he would seek to pressure Israel to lower its steep 22% tariff on large imports of foreign-made grape juice. At an event in upstate New York’s Chautauqua County, – one of the biggest grape-growing regions in the eastern US, and the largest Concord grape crop in the world – Schumer said that a lower Israeli tariff would not only make grape juice cheaper for Israelis, but would also enable farmers to export more of their crop instead of destroying it, as will happen this year.

Why Israel? “Grape juice is a staple at Israeli dinner tables, and opening up the Israeli market, and any other foreign market, to more American grape juice exports would be a tremendous boon to Chautauqua County concord grape farmers,” said Schumer. Israel is already a major foreign customer of New York State grapes. Kosher wine producer Kedem already exports 1.8 million liters of kosher Concord grape juice to Israel each year, almost all of it harvested by Chatauqua farmers, and most of it drunk by religious Jews, especially immigrants from the US who know the product) at their Friday night Shabbat tables.

Israel, by contrast, has its own important wine industry, and the tariff is designed to partially protect it from foreign competition.

This year was a particularly good grape-growing year in upstate New York, and Schumer said Kedem is prepared to buy more grapes – but it needs a market to sell to. Because it already has contacts for exporting grape juice to Israel, this country would be an ideal one for Kedem to expand its sales. However, Israel will “admit” only 100,000 liters of grape juice annually. After that, importers have to pay the 22% tariff, which Schumer said is “standing in the way” of additional exports.

What’s especially unfair, he said, is that “the US eliminated its tariff on grape juice from Israel” in 2013, and the right thing to do would be for Israel to reciprocate, or at the very least raise its tariff-free import limit to 230,000 liters, the same amount the European Union allows in without taxes. Like Israel, the EU has an advanced grape-growing and production industry it wishes to preserve.

“While the reduction in the [Israeli] tariff on US grape juice in 2004, from 120 percent to 22 percent, was a step in the right direction and has resulted in an increase of US grape juice exports to Israel from $200,000 to $2 million over six years,” Schumer said, “more work must be done to ensure US producers have the opportunity to compete in this high-demand market. New York grape juice producers estimate that grape juice exports to Israel could double if Israel’s tariff is eliminated.” The US exported over 1.8 million liters, $2 million worth, of kosher grape juice to Israel in 2013 alone – almost all of it by Kedem, and almost all of it from Chatauqua grapes.

Kedem, as would be expected, is on board. “As a family-run company for four generations and the second largest grape juice company in the United States, Royal Wine has relationships with farmers growing Concord grapes in New York that go back decades,” said Nathan Herzog, Executive Vice President of Royal Wine Corp, Kedem’s parent company. “We are pleased that Sen. Schumer is working to break down trade barriers and expand the market for Concord grape juice in Israel, which will be good for farmers and the economy here in Chautauqua County and throughout New York State, and will help us continue to expand our company in New York and around the world.”

Not so clear is the Israeli government’s position. A spokesperson for the Economics Ministry said she was “not familiar” with the issue and would have to do some research before providing a definitive answer. However, the office is likely to hear about it very soon. Schumer said that he has spoken to the US Trade Representative (USTR) official in charge of trade agreements with Israel, asking him to “make re-negotiating the grape juice tariff a priority and do everything he can to get Israel to open its market up even further for Concord grape juice.”

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