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<\/figure>\n\n\n\nIn 2019, as noted, local manufacturers decided to reduce their production due to the low controlled price, and butter sales from local production dropped from 4,810 tons the previous year to 3,188. In response to the shortage thus created, it was decided to increase duty-free import quotas, with sales of imported butter rising to 1,508, bringing total sales that year to 4,697.<\/p>\n\n\n\n
A year later, the tariff on butter imports was eliminated across the board, and the sales volume soared by 35% to 6,334, with imports accounting for around 2,800 of that amount. As the chart shows, imports remained at the same level in the following year of 2021, while local production declined for the last time up to that point, and began to grow thereafter. The reason for this is that the controlled price was completely eliminated at the end of that year, prompting local manufacturers to increase their volume once more, gradually expanding their market share year after year from then on, as is evident in the chart.<\/p>\n\n\n\n
Another factor to note is the wide variety of imported butter; some of it is of higher quality than the local product. A review of the Israel Competition Authority states that the shift to a blanket tariff exemption also led to an increase in the variety of butter products, with the number of butter product SKUs growing by tens of percent as early as in the first months following the exemption. Moreover, this expansion in variety was recorded across a large number of retailers, and was not limited to a few individual players.<\/p>\n\n\n\n
For these reasons, the argument that the rise in butter prices means the reform failed is baseless. First off, the controlled upper price existed only on paper, and cannot be compared to the prices that followed its abolition, since it was impossible to actually sell butter in the necessary quantity at that price, as evidenced by the shortage that followed it. Secondly, the wide variety of butter products also includes higher-quality butter, which is not comparable.<\/p>\n","protected":false},"excerpt":{"rendered":"This week, the Ministry of Agriculture published a review of the butter market in Israel. Media reports presented a conclusion drawn from the review: opening the market to importation and eliminating price controls led to a rise in butter prices. However, the framing that focuses on the price without addressing quantities distorts the overall picture. […]","protected":false},"featured_media":7572,"template":"","article-category":[],"custom-tags":[2338,2120,36,715,1003],"ppma_author":[49],"class_list":["post-12652","article","type-article","status-publish","has-post-thumbnail","hentry","custom-tags-butter","custom-tags-economic-regulation","custom-tags-economy","custom-tags-free-market","custom-tags-import"],"acf":[],"yoast_head":"\n