News from Israel

More Competition in US from Overseas Dairy Producers

Jerusalem… It is no secret that Israeli dairy producers have their eye on a significant presence in the US kosher market. Tnuva has already made its move with the introduction of many of its products on supermarket shelves. The Israel Dairy Board is also moving forcefully to increase the presence of Israeli dairy products. G. Willi-Food, which recently acquired Laish Imports, is the latest to eye the US kosher dairy market. Willi, through its Gold Frost subsidiary, is planning to introduce many new dairy products to the US kosher market. Its supplier, Arla Foods, is a major European producer of dairy products. It already has approval from US authorities to import non-kosher Lurpak butter and Brie and Camembert cheeses into the US on behalf of unrelated third parties. Arla has now allocated a portion of its existing import licenses to kosher Lurpak butter and Brie and Camembert cheeses for distribution by Gold Frost. These products will be produced according to Gold Frost's kosher instructions at Arla's factory in Denmark, and Gold Frost will purchase the products directly from the factory in Denmark or from Arla Foods in the US. Shipments of these products to the US may commence once Gold Frost has produced new product labeling in compliance with USDA regulations.

Zvi Williger, President and COO of Willi-Food stated, "We are very excited about this opportunity. Our strategy to bring high-quality kosher dairy products to the US market is moving forward. The agreement with Arla to begin importing kosher dairy products into the US is an indication of the strong growth potential for our product line in this market. We intend to complete final labeling requirements for compliance with USDA regulations in the next few months." In the meantime, Mivtach Shamir Holdings and Apax Partners have signed an agreement to jointly acquire the controlling stake in Tnuva Food Industries Ltd. through an Israeli corporation to be set up for this purpose, in accordance with Apax’s purchase contract with Tnuva. Sources say that the new majority owners are also expected to increase exports to the US.

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