10.30.14

SCHUMER LAUNCHES CAMPAIGN TO GET U.S. TRADE REP TO OPEN FOREIGN MARKETS TO MORE CONCORD GRAPE JUICE – GLUT OF CONCORD GRAPES COULD BE EXPORTED TO ISRAEL, BUT MANY ARE GOING TO WASTE DUE TO BURDENSOME TARIFF; OPENING ISRAELI MARKET WOULD BE A BOON FOR CHAUTAUQUA GROWERS

Kosher Grape Juice Is A Staple On The Dinner Table In Israel & U.S. Brand Kedem Wants To Increase Its Share of Israeli Market – Company Already Exports 1.8 Million Liters of Kosher Grape Juice per Year to Israel, But Wants To Export More; Would Buy More Grapes From Chautauqua Grape Growers If Tariff Is Reduced

Schumer Urges Fed Trade Rep, Who Is Currently Negotiating A Trade Agreement With Israeli To Prioritize Lowering or Eliminating the Grape Juice Tariff That Is Holding Back Chautauqua Growers – Schumer Says U.S. Does Not Impose Same Tariff on Israeli Grape Juice & This Tariff Has Been Successfully Lowered In Previous Negotiations


Schumer: Lower Israel Grape Juice Tariff Means More Demand for Grapes and Increased Competitiveness For Chautauqua & New York State Growers

Today, at the Grape Discovery Center in Westfield, U.S. Senator Charles E. Schumer joined with local Concord grape growers to push to lower an Israeli tariff on U.S. grape juice that, if reduced or lifted, would enable Chautauqua County growers to sell more grapes. Schumer explained that Israel currently imposes a 22% tariff on any company looking to export more than 100,000 liters of grape juice into the country. Schumer said that one of those exporters, a company called Kedem, already sends 1.8 million liters of kosher Concord grape juice to Israel each year, and the company is looking to buy more Chautauqua grapes and potentially double its exports, but this high Israeli tariff is standing in the way. Schumer urged the U.S. Trade Representative (USTR), who is currently in the midst of trade negotiations with Israel, to prioritize lowering or eliminating this tariff, which has already been successfully lowered during previous trade negotiations. Schumer said that any improvements to the tariff would be a boon to local Chautauqua County Concord grape growers because it would further open up the Israeli market, where grape juice is a major staple of the diet.

“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. But an unfair 22% trade tariff is standing in the way, which is why I am urging the U.S. Trade Representative (USTR), who is currently in the midst of trade negotiations with Israel, to lower or eliminate this tariff,” said Schumer. “The current glut of concord grapes should not go to waste, and lowering this tariff would be a great way to ensure more of these grapes hit the market and prices stay where they should be. There is a tremendous thirst for Concord grape juice in Israel, and we need the U.S. Trade Representative and the U.S. Department of Agriculture to knock down the barriers that are standing in our way. Israel has more generous grape juice trade agreements with other countries, and they should give American grape juice and Chautauqua growers the same treatment.”

Currently, Israel imposes a 22 percent tax on all grape juice exported to the U.S. from Israel in excess of 100,000 liters. This tariff has prevented American-made grape juice from effectively competing in the Israeli market, and has cut down on potential exports. Schumer said that Israel should be a prime destination for U.S. grape juice – specifically kosher grape juice – due to the fact that there are over one million Americans living in the county and because grape juice plays such an important role in the local culture, diet and religion. Unfortunately, however, this tariff is preventing U.S. grape juice from reaching its full market share potential, and therefore hurting Concord grape growers in Chautauqua County who would benefit from a lower tariff and increased exports. According to the USTR, grape juice exports totaled $23 million in 2013; Kedem’s exports to Israel totaled approximately $2 million in 2013, constituting 11.5 percent of its total exports.

Schumer said that not only is this low 100,000-liter quota unfair and the tariff too high, it is not on par with tariffs on grape juice exports to Israel from other countries. For example, Schumer noted, grape juice exports from the European Union into Israel are taxed after 230,000 liters, allowing companies in Europe to export 130,000 more liters into Israel than a U.S. company before being taxed. In addition, Schumer said, the United States does not impose any quota on Israeli grape juice exports into the United States.

Schumer said that this quota and tariff has real consequences for Chautauqua grape growers, and he specifically pointed to Kedem, a U.S. company that is a leader in exporting kosher grape juice. Kedem has indicated it would like to export more Concord grape juice to Israel, but the tariff is standing in the way. Kedem has said that if the tariff and quota are reduced or eliminated, they could potentially double exports, which would be a boon for the Concord grape growers in Chautauqua County. Schumer said that currently, there is a glut of Concord grapes and Concord grape juice, which means grapes will go to waste and prices will drop next year due to the amount of juice in the market now. Increased exports to meet demand in the Israeli market would benefit Chautauqua’s growers by helping to limit oversupply and allowing for additional expansion and investment.

The U.S. Trade Representative (USTR) is currently undergoing trade negotiations with Israel, and Schumer said the grape juice tariff is one of the items being discussed. Schumer urged the USTR 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. Schumer argued that there is precedent for lowering this tariff, noting that during previous trade negotiations, the USTR was able to drop the tariff from 120 percent to the current 22 percent.

Schumer was joined by Howard Ross, Concord Grape Grower, owner of the Grapes of Ross; Brent Roggie, General Manager, COO, & Treasurer, Welch’s; Terence Bates, Director, Cornell Lake Erie Research & Extension Laboratory; and local growers from across the Chautauqua County Concord Grape Belt.

“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 Senator 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.”


“Our family has been farming in Chautauqua County since 1950,” said Howard Ross of Grapes of Ross Farms. “But the grape industry is in a serious crisis right now. There is more grape juice available than the U.S. market demands, which is driving down prices. I am grateful to Senator Schumer for urging the U.S. Trade Representative to make eliminating this tariff a priority, and opening up another market for New York State grapes. Senator Schumer understands that we need to do everything we can to support growers, and keep the grape industry sustainable and profitable.”

“The Concord grape is an uniquely healthful fruit indigenous to the United States.  The Concord Grape belt, which stretches into Chautauqua County, NY, is the largest Concord grape crop in the world. As an agricultural cooperative, our family farmer owners grow grapes that are sold as Welch’s 100% Grape Juice.  Welch’s is expanding its global footprint to bring the goodness of Concord grape to more people and places,” said Wayne Lutomski, Vice President of International at Welch’s. “Tariff barriers prevent Welch’s from fully developing a market and affording consumers the opportunity to taste and love our great tasting product. Israel’s tradition of grape juice consumption is long and storied. Grape juice is an integral part of the culture, and there is a demand that is not currently being met. Grape juice from New York State is uniquely suited to needs and Welch’s would like very much to profitably export product there and help meet the consumer need.”

Schumer has been a fierce advocate for Chautauqua County grape growers. In September, Schumer announced with Senator Gillibrand that the U.S. Department of Agriculture (USDA) had agreed to purchase $25 million in surplus Concord grapes and grape juice to help stabilize prices for Upstate New York growers. The juice was subsequently used in domestic food assistance programs. Schumer also secured approximately $5.6 million in USDA funds for specialty crop assistance across New York through the Specialty Crop Block Grant Program. These funds were allocated as a part of the Fiscal Year 2014 Farm Bill, which Schumer voted to pass. Schumer also pushed to secure $2.1 million in federal Economic Development Agency (EDA) funds for a new waste water treatment plan overhaul in the Town of Westfield. This overhaul was significant because approximately 80 percent of the operational cost of the waste water treatment facility was absorbed by the grape processors and growers in the area, lessening the financial burden on both the Town of Westfield and its residents. Finally, in May, Schumer urged the USTR and the USDA to end a 19.1 percent tariff on grape juice while the U.S. was in trade negotiations with Japan.

Dear Ambassador Froman and Secretary Vilsack:

I commend your efforts to achieve a comprehensive and ambitious agreement in extension of the U.S.-Israel Agreement Concerning Certain Aspects of Trade in Agricultural Products (ATAP) and I write to urge the USTR and USDA prioritize the elimination of Israel’s grape juice tariff in the ongoing negotiation.

As you know, the U.S. has eliminated its tariff on grape juice from Israel and faces a competitive disadvantage to the European Union’s (EU) producers in Israel’s market as a result of the preferential quota treatment EU currently receives. While the reduction in the tariff on U.S. grape juice in 2004, from 120 percent to 22 percent, was a step in the right direction and has resulted in an increase of U.S. grape juice exports to Israel from $200,000 to $2 million over six years, more work must be done to ensure U.S. 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. 

Israel offers a niche Kosher grape juice market that New York grape juice producers are uniquely suited to supply. The U.S. exported over 1.8 million liters, $2 million worth, of kosher grape juice to Israel in 2013 alone. Concord grapes, grown predominantly in New York State, are used to produce kosher grape juice. In addition, there is currently a saturation of the U.S. grape juice market, which has depressed Concord grape prices for growers in my state.  Lowered trade barriers to Israel’s grape juice market would benefit these growers by increasing grape juice exports to Israel, a market where prices are increasing as a result of unmet demand.

Thank you for your attention to this important issue.  I appreciate the good efforts of USTR and USDA over the years to expand our trade relationship with Israel, one of our strongest export markets, and I urge you to work toward a final extension of the U.S.-Israel ATAP that improves market access for U.S. grape juice into Israel through tariff elimination.

Sincerely,

Charles E. Schumer

United States Senator

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