The Israeli Dairy Industry and the Occupation
This flash report presents an in-depth economic and political analysis of the Israeli dairy market while drawing special attention to the complicity of specific Israeli corporations in the economy of occupation.
In addition to the outlined involvement of each corporation below, all corporations mentioned in this report reap profits by exploiting the Palestinian captive market and using it as a major source of income.
By taking the Israeli dairy market as an example, this report explains in detail the effects of this economic strangulation of the Palestinian market. Tnuva, one of the biggest corporations in the Israeli dairy and food industry, is presented in this report as an important case study. Through Who Profits' desk and field research, compelling proof was obtained that Tnuva uses raw material for its dairy products from Israeli settlement dairy farms in the occupied West Bank (See videos below). Tnuva's corporate activity is taking place despite the recent EU ban on animal products from Israeli settlements, which was declared in February 2014 and became enforceable as of January 2015.
This report is also available in Arabic.
Tnuva's involvement in the Israeli occupation and the EU ban on dairy products from settlements
On September 8th and October 1st in 2014, two Taavura trucks were documented (respectively) leaving the Carmel Maon and Beit Yatir Israeli dairy farms in the West Bank, traveling on bypass roads between settlements and ending their journey in Tnuva's main factory in Rehovot, within the Green Line (see videos below). Recently, on the 12th of July another Taavura truck was documented again entering and leaving the dairy farms of Carmel Maaon, Migdal Oz, and Rosh Tzurim all of which are in the West Bank, and ending their journey in Tnuva's main factory in Rehovot as in the previous videos.
The videos below provide compelling evidence that Tnuva, one of the biggest corporations in the Israeli dairy and food industry, uses raw material for its dairy products from Beit Yatir, Carmel, Migdal Oz, and Rosh Tzurim which are all settlements in the West Bank. The Beit Yatir settlement is situated south of Hebron; The Migdal Oz and Rosh Tzurim are settlements in the Gush Etzion Region in northen Hebron hills; and the Carmel settlement is situated southeast of Hebron, and its dairy farm consists of some 500 cows and produces nearly 6 million liters of milk per year.
Tnuva's documented use of settlement produce has been taking place despite the recent EU ban on animal products from Israeli settlements, which was declared in February 2014 and became enforceable with regard to dairy products as of January 2015. According to this regulation, the European Commission no longer recognizes the authority of Israeli inspection agencies over "territories under Israeli administration since June 1967," and without such an inspection the dairy products from those areas ("the Golan Heights, the Gaza Strip, East Jerusalem and the West Bank") cannot be distributed in EU member countries. This decision was made in accordance with the EU guidelines concerning Israeli settlement products. In August 2014, following the European Commission's decision to ban animal products from settlements, the Israeli Ministry of Agriculture issued a vague and general warning advising dairies to separate raw milk from settlements from raw milk produced within the Green Line.
Tnuva might claim that it operates two production lines within its factory, separating between raw milk from settlements and raw milk produced within the Green Line, yet such a claim is frail at best. First, there is no evidence of such a separation model in the entire Israeli enterprise, especially not in the agriculture and food industry. Second, entering the factory and obtaining solid proof that this separation indeed takes place is nearly impossible. And finally, even if the production lines were indeed separated, it would not in any way cure the illegality of exploiting Palestinian land and resources nor does it diminish the negative impact of strangling the Palestinian market. Whether such a separation takes place or not, Tnuva's activity contravenes international law. Article 55 of the Hague Regulations (1907) establishes that "the occupying State shall be regarded only as administrator and usufructuary" of the natural resources of the occupied territory, and therefore it is prohibited from exploiting them for commercial purposes. Moreover, Article 43 of the Hague Regulations has been interpreted as obliging the occupying State to exercise its powers for the benefit of the residents of the occupied area.
More importantly, Who Profits' videos were filmed both before and after the ban's enforcement date, illustrating a fixed corporate pattern of Tnuva within the Israeli economy of occupation. In this case, Tnuva's activity enables the routine exploitation of Palestinian land, resources and market, while disregarding specific and clear guidelines.
The Israeli Dairy Industry
Although the recent EU ban clearly states that member countries are prohibited from importing dairy products produced in Israeli settlements, either directly or indirectly, Tnuva remains an important exporter to many EU countries. The Israeli dairy industry is estimated at NIS 7.5 million, and it is mainly controlled by Israeli corporations. These corporations not only profit heavily by exploiting land and resources both in the West Bank and Golan Heights, but they have also penetrated and strangled the local Palestinian dairy market and the Palestinian market in general (see below).
The main corporations in this dairy market are Tnuva, with 55.2% of the market share; Strauss with 21.3%; Gad Dairies with 3.6%; and Tara with 11.3%. In addition, Ramat Hagolan Dairies (Golan Heights Dairies) and Shufersal are expected to see a notable increase in profits in the near future, as the two companies launched a new joint line of discounted dairy products.
As shown below, when it comes to corporate involvement in the Israeli occupation, Tnuva is not the only complicit party within the dairy industry.
Manufactures and distributes dairy products. The company also functions as a holding company and a major shareholder of Olivia Maadanot, Sanfrost (frozen vegetables), Anvei Tzion (a jam manufacturing company in Ashkelon) and Ba'emek Advanced Technologies (which specializes in various whey and lactose products), alongside smaller companies. The company holds more than 55% of the Israeli dairy industry, and its revenue in 2014 totalled NIS 6.8 billion. Tnuva is also the biggest Israeli poultry distributer; in 2010, it held 51% of the Israeli market, with revenues of NIS 311 million. In March 2015, the Chinese corporation Bright Food completed the acquisition of a controlling share of Tnuva.
Manufactures and distributes dairy products. The company is a major shareholder (approximately 81%) of Meshek Zuriel Dairy, which owns a dairy farm in the settlement of Shadmot Mehola in the occupied Jordan Valley. Tara has an exclusive agreement with the German company Müller to produce and market Müller's products in Israel.
Originally founded by Tara and Strauss, the company is now owned by four settlements in the occupied Golan Heights: Ein Zivan and Ortal (which also have ownership of the Golan Heights Winery), Gadot and Shamir. Each of the four settlements owns 19% of the company. Rafi Eitan, a former Mossad officer and former Minister for Senior Citizens, holds 5% of the company's shares. Although no longer directly owned by Tara, the company still provides some of Tara's dairy products.Ramat Hagolan Dairies cooperates with 18 farms that are located in the Nov and Avnei Eitan settlements in the Golan Heights. In 2014, the company's sales were estimated at NIS 80 million.
Shufersal is Israel's largest retail chain. The company built a commercial center in Mishor Adumim, which is the industrial zone of the West Bank settlement city of Ma'ale Adumim. The company also operates a branch in Gilo, a settlement in East Jerusalem. One of Shufersal's sub-chains, Yesh Supermarkets, has branches in several West Bank settlements, including Modi'in Illit and Ariel.
In May 2015, the company launched its private dairy brand, "Shufersal," which garnered local media coverage due to its discount prices. Most of the products under Shufersal's private brand are manufactured by Ramat Hagolan Dairies.
Shufersal also distributes other products under its private brand that are manufactured in West Bank settlements. For instance, the company sells legumes and rice that are exclusively packed by Maya Foods in the Mishor Adumim industrial zone, pickles by Motola Preserves, which is located in the settlement of Immanuel, and cleaning products by Plasto-Polish, which are manufactured in the Barkan industrial zone.
Develops, manufactures and markets computerized systems for dairy farms and herd management. During 2008, the company has erected a large milking factory in Susya, and supplied the dairy with an automated system for herd management. Susya is an Israeli settlement in the occupied West Bank. The company, owned by the Kibbutz of Afikim, is building an additional farm inside the West Bank city of Hebron. This Israeli dairy farm is being supported by the SAE Afikim company in a bid to fight the alleged "milk shortage" in the Palestinian market which further tightens the Israeli grip over a Palestinian captive market. In addition, the company has built dairy farms in China and Vietnam as well.
Taavura Trucks and Services to Settlements
In all the videos documenting Tnuva's involvement, Taavura's involvement is also apparent. The company provides its trucks for the transportaion of the dairy raw material from the Israeli settlements mentioned above to Tnuva's factories in Rehovot.
This is hardly Taavura's only involvement in the occupation. The company is heavily involved in numerous and various ways. For example, Taavura provided its heavy haulage and installation engineering services to the Israeli authorities during the construction of the Separation Wall, it also participated in the construction of two bridges in the West Bank, one above Road 1 near the settlement industrial zone of Mishor Adumim and the other as part of Road 20/4 above Road 433 in the West Bank (a segregated road for Israelis only). Furthermore, Taavura hauled parts of Herrenknecht tunneling machinery form the port to construction site of the Tel Aviv-Jerusalem new fast train line. The fast train crosses the Green Line into occupied Palestinian territory. Finally, during the attack on Gaza in November 2012 (also known as Pillar of Defense operation), the company transported Israeli tanks to the front lines.
The provision of Taavura's services to settlements in all of its activities in the Occupied Palestinian Territory helps sustain and further expand existing and new Israeli settlements and projects it also facilitates the illegal activities of the Israeli authorities in both Gaza and the West Bank. [Fore more information see Taavura's Page].
Export and Cooperation: A Major Source of Profit for the Dairy Industry
The revenues of the Israeli dairy industry are chiefly made from exports, which reached USD 27 million in 2013 alone. In 2014, Israeli dairy export was divided in the following manner: North America: USD 10.5 million; Asia: USD 6.5 million; and Europe: USD 10.5 million - a 97% increase in relation to previous years. 
As Israel is a global leader in milk yields, many countries have secured economic ties with the local milk industry, thereby boosting and legitimizing its activity in the Occupied Palestinian Territory. For instance, the state of Punjab in India has sent a team of Punjabi farmers to train in Israel last year, in order to import Israel's technology-driven dairy production. Similar replications of Israeli dairy projects have been implemented in China, India, Vietnam and Canada. In addition, delegations of farmers from France, Thailand and Russia have visited Israel's agricultural research institute Volcani Center, where they learn about the dairy industry and see the institute's cowshed ecosystem in Beit Dagan.
The Dairy Industry, Israeli Government Policies and the Captive Palestinian Market
According to the Israel Dairy Board (hereinafter: IDB), the Israeli dairy industry holds approximately 125,000 dairy cows in hundreds of cowsheds, both communal (kibbutzim and moshavim) and family cowsheds. In 2014, Israeli dairy farms produced 1,455 million liters of cow milk, 11.2 million liters of sheep milk and 15.9 million liters of goat milk.  The official IDB map denies the existence of Israeli farms in the West Bank.  However, as noted above, Who Profits has documented several dairy farms operating in settlements in the West Bank. In addition, there are also several dairy farms operating in the occupied Golan Heights.
West Bank Farms: Shadmot Mehola (works with Tara), Carmel Maon (works with Tnuva), Beit Yatir (works with Tnuva), Halav Haaretz dairy in Susya (works with Afimilk), Danron dairy farm in Mevo Horon, and other smaller farms, such as the Guri goat farm in the settlement of Tomer in the occupied Jordan Valley.
Golan Heights Farms: There are at least 18 dairy farms located in the occupied Syrian Golan, for example in the Nov and Avnei Eitan settlements.
The corporations mentioned above reap additional profits by exploiting the Palestinian captive market. Tnuva is a clear example of this, as it makes about USD 52-65 million per year from sales in the Palestinian market. In this context, in February 2015, several Palestinian organizations declared a boycott on six Israeli companies that forcibly sell food and dairy products in the West Bank: Tnuva, Strauss, Osem, Elite, Prigat and Jafora, companies whose products can have a viable Palestinian alternative. The call to boycott these companies followed Israel's decision, announced in January, to withhold the transfer of tax revenues to the Palestinian Authority, totaling more than USD 100 million per month.
The success of the Israeli dairy industry is bolstered by Israel's systematic government policies, which suppress the local initiatives of Palestinian farmers in the West Bank and Gaza. For example, in December 2014, the Israeli military destroyed a dairy factory in the Palestinian village of al-Burj, in the Hebron area. Israeli soldiers and Civil Administration officers accompanied two bulldozers into the village and completely demolished the entire factory. Similarly, in May 2012, an entire dairy farm was demolished by Israeli forces in the Palestinian village of Khaled al Wardeh, which is also in the Hebron area. The farm sustained the livelihood of many Palestinian families.
In August 2014, during the last Israeli attack on Gaza, the Nadi family farms in Bet Hanoun, that held a stock of 370 cows, was demolished by a targeted shelling from tanks positioned inside the border. According to the owners, the milk yield from the remaining stock had plummeted due to the animals' trauma. In Beit Lahiya, 20 farm animals were deliberately shot by Israeli ground forces. These animals provided the only income supporting 17 members of the family (in Gaza the cow is estimated to be worth 2800 USD).
The large dairy factory Dalloul, which was one of the few dairies meeting Gaza's needs, was destroyed twice: first in January 2009 and again in April 2010. The destroyed factory, located in Gaza City, used to provide the local population with milk and cheese on a daily basis, for significantly lower prices than the Israeli products that are imported into Gaza. In Gaza Tnuva holds major shares in the Palestinian captive market as it ships 200 tons of products to the Strip every day. The most popular products are milk and cream, and they are distributed to approximately 1,700 different stores in Gaza.
The picture portrayed above is only the tip of the iceberg. The Israeli dairy industry is not an exclusive example: Many Palestinian industries and family businesses suffer from similar and even harsher policies. As an integral part of the occupation, the Israeli economy not only undermines the opportunity to establish a Palestinian market that has the capacity to meet the needs of the population as a whole, but also harms small businesses that provide an income and sustenance to Palestinian families.
The dairy market is a clear example of the profit made by Israeli companies at the expense of Palestinian land, economy and livelihoods. This market is just one part of a larger industry of food, water and agricultural products. To read about other agricultural crops produced in Israeli settlements and exported under the label "Made in Israel," see the Who Profits report Made in Israel: Agricultural Export From Occupied Territories.