Globes, Eric Mirowski, 11.05.2020
A few months ago, a Facebook page called "Cement - Importer Cement" came up with a series of invested animated videos that explain how competition in the cement market is going to be hurt. The competition, he emphasized, saves consumers about NIS 350 million a year. Red Eagle, which appears in one of the videos, of course, symbolizes the Israeli cement monopoly Nesher, which controls more than 50% of the market, and is shown to be responsible for curbing competition. "They say no to Hamlet Combine," the slogan says.
Another video is directed directly at the head of a senior Ministry of Economy employee named Danny Tal, who serves as VP of import and charge of trade levies. him? What is he hiding and why? ", The end of the video was thrown into the air about the public employee's intentions in the face of dramatic music.
Behind the campaign around the issue of the import of cement and Tal's work on the subject, hides big money. It is estimated that the cement market rolls about NIS 3 billion every year, and two main groups are fighting for profits: On the one hand, the veteran Nesher company, whose operation in Ramla, along Highway 6, is hard to miss. The company that is considered a monopoly in the field is held by a resource company controlled by Clal Industries, whose controlling shareholder is Len Belvetnik.
After many years in which Nesher held the majority of the market, cement imports came from abroad (mainly from Turkey and Jordan), by Symant, which belongs to Israeli shipyards controlled by businessmen Sami Katsav and Shlomi Vogel. Today, various importers hold a share that approximates 50% of the use of cement In Israel, the price of cement affects about 1% of the price of an apartment.
A 23% levy on imports became 0.25%
About a year and a half ago, Tal recommended imposing a full levy, ie a high tax, on full imports into Israel, after a thorough examination. This was a 23% levy, but finally with the consent of Economy Minister Eli Cohen a marginal levy of only 0.25% was decided. There was a stalemate surrounding this decision, and with the decision, which came into effect in April 2019, it was due.
But the battle resumed last summer. This is in light of the Finance Committee's position, which led to a further investigation into the issue and Tal started again. Sources with whom we spoke claimed that behind the recast were elements identified with "eagle". Of course, they did not like the decision, and even hired former antitrust commissioner Dror Strum. Last month, Strum appealed to the state comptroller to investigate the matter, raising questions about the integrity of the process that is currently taking place.
"From an early stage of the investigation, it became clear that the Commissioner (Danny Tal. UM) opened it without authority ...," wrote Strum. The Finance Committee said that "it required the Commissioner to reopen the examination as soon as possible in order to raise the rate of the levy. This is of course without authority, grounds or administrative reasonableness. In fact, the commission had signaled to the commissioner the purpose in advance and instructed him to act to achieve it. "The procedure as a whole was said to be" distorted and biased "and that the conduct as a whole was referred to as" expressing foreign considerations and greater inadequacy. "
"In this bitter battle there are no righteous, only great money"
The pressure doesn't end here. Two weeks ago, Hanson, one of the largest cement companies in Israel and a cement importer, itself filed a petition for a restraining order to hold a meeting of the levies committee, which was to discuss Tal's findings, which according to the latest report he plans to recommend again imposing high levies. Given the limitations of Corona's disease, the meeting of the committee chaired by Advocate David Winnicki was to be held through the Zoom app. , Which states that the committee hearings will be held at closed doors ... In simple terms, this is a potential discussion with over 100 participants. The way decided to conduct the 'hearing' will, of course, be harmed by the parties' argument for the re-examination procedure, "the petition said, which she also sought to join.
"The commissioner's findings are not fundamentally wrong, they should not be accepted at all and can harm the cement and cause very severe distortion of competition in the cement industry in Israel," said their application, which also raised claims against the use of zoom. "The applet is not free of security loopholes, to say the least, which is at odds with the directive on closed doors," it said, in an attempt to postpone the hearing. Last week, the application for the interim order was rejected, and the hearing before the committee is expected to be held Tuesday this week.
Compared to importers, Nesher, who for many years enjoyed good connections in government bodies, today claim that those who violate the principles of competition are importers of cement. This is because they are taking advantage of the situation in Turkey, where many cement plants have been set up, producing considerable surplus production there. The Turks have no choice but to sell their cement at the prices of Israeli importers, and therefore those who determine the level of cement prices in the country are the Turks and do not drop.
In Eagle, their situation is becoming increasingly challenging, and they have recently had to lay off about a fifth of their workforce and reduce production capabilities.
"Tal may recommend to the permit committee, but there are a number of factors that need to be considered before a decision is made," emphasizes a senior Ministry of Economy official who wants to counter the pressure exerted on conducting the reconsideration process and against allegations of foreign motives in Tal's work. The Globes review revealed that after the debate this week, the committee will hold a 45-day procedure, at the end of which its recommendations will be submitted to the Minister of Economy. Within a month, the committee and the finance minister will submit their positions to the finance committee, which is scheduled to discuss the issue and decide, and the final decision must approve the incoming economy minister. In light of the long process on the way to a potential change in Hamlet's levy policy, a senior economics official said that "there is no righteous person in this story. There are mainly two sides here who are waging a bitter battle for big money."