Israel’s wine industry is thriving, and Israel’s wine exports remain largely very healthy. This is in spite of the fever-pitched efforts of the fiercely anti-Israel ‘Boycott, Divestment and Sanctions’ (or BDS) movement promoting international punitive economic policies against Israel, and consumer boycotts of Israeli goods. So far, good wine continues to trump such hate-based campaigns and the critical and consumer appreciation for Israeli wines continues to grow.
“Israeli wines remain an incredibly strong growth area in the kosher wine world,” says Jay Buchsbaum, VP Marketing and Director of Wine Education with the Royal Wine Corp., the largest producer, importer and distributor of kosher wines and spirits with 27 different Israeli wineries in its portfolio. “While some brands are steady performers,” says Buchsbaum, “others seem to fly off the shelf…some of the wineries can’t produce anything like enough volume to satisfy U.S. demand.”
Josh Greenstein, of the Israeli Wine Producers Association adds that “Israeli wine is now being acknowledged, even lauded, for its successes.” More than “50 Israeli wines,” he notes, “have been awarded 90+ scores by such renowned industry experts and critics such as Robert Parker’s The Wine Advocate, and by Wine Spectator, Wine Enthusiast and Decanter magazines.” These wines are not, he observes, “being recognized as great kosher wines or as great for Israeli wine, but as great wines amidst the world’s variety of great wines.”
All this positive critical attention has not gone unnoticed, as Israel wine export figures remain very good. According to the latest report from the Israel Export and International Cooperation Institute, Israel’s global wine exports grew 6% to $39 million in 2015. In this same period, Israeli wine exports to the United States, the largest market for Israeli wines, grew 8% to $25 million.
Interestingly the Israeli wine sector’s exports to Asia, where there is no significant demand for kosher wine, rose a whopping 16% to $2.6 million. Israel’s domestic wine market enjoys annual sales of around NIS 1 billion (around $257,248,000. USD), with exports totaling 40 million bottles a year, plus 10 million more bottles of grape juice. Roughly 20% of Israel’s wine industry output is for export.
“Traditionally, the Israeli wine export was based on the demand for kosher wine by Jewish communities around the world,” says Yaara Shimoni, the wine and fresh produce manager for the Israel Export and International Cooperation Institute. “However, a recent trend,” she notes, “sees Israeli wines gaining international recognition and respect also in countries where the kosher issue is irrelevant,” like Japan and China, and this really “shows the global progress of the Israel wine brand.”
One dark spot in the report concerns Europe: Exports to the European Union were down 18% to $10 million during this same period. According to the Israel Export and International Cooperation Institute this decline is due largely to the “Euro crisis” (the multi-year European sovereign debt crisis), rather than to any European boycotts or related BDS activities. More than a few folks in the Israeli wine industry, however, think something far more sinister is going on.
In November of 2015, after all, the EU delivered on its previously publicized intention to issue labeling guidelines on Israeli products that seeks to penalize Israeli settlement policy. In the US, the Obama Administration—a similarly harsh critic of Israeli settlement policy—ultimately indicated its support for the European measure. Even more troubling, the Obama Administration more recently announced its own similar guidelines despite overwhelming bipartisan Congressional support for Israel. The US measure is not likely to prevail, while the EU guidelines are already taking root.
Under the new EU directive, Israeli goods produced in the Golan Heights or in Judea and Samaria, the so-called “West Bank”, must display labels such as “Product from the Golan Heights (Israeli settlement)” or “Product from the West Bank (Israeli settlement)”, rather than “Made in Israel” if they are to be sold in Europe. The EU was quick to distance itself from BDS campaigns which sought to take credit for the EU directive. Regardless, the punitive effects on trade of the EU’s policies remain very real.
Some major public figures have decided to fight back the BDS movements such as Jewish billionaire Sheldon Adelson. Last summer, Adelson hosted a secretive closed-doors summit at his luxury resort “The Venetian” in Las Vegas. According to the reports, roughly $20 million were raised. While these efforts have been helpful in the USA, they have so far very little impact in the EU.
According to Yaakov Berg, CEO of Psagot Boutique Winery, the EU directive is all bad. In fact, his exports to Europe and South Africa declined by 50% already back in 2014 due to unofficial BDS sentiments. The first sign of trouble reared its head a few years earlier, he said, when he refused a South African importer’s request to label his wines “Made in Occupied Palestine” and thereby lost that importer’s business. “We were not surprised for the European decision,” says Berg, “the Europeans haven’t been so nice to the Jewish People historically—so I think it’s not a huge surprise.”
Other Israeli winemakers have also experienced financial loss due to the EU directive. According to Amichai Lourie, winemaker of the Shiloh Winery, which produces 100,000 bottles annually, his winery’s exports to Europe have disappeared following the EU’s November 2015 directive. “Our sales in Europe dropped to zero,” he says, “literally, zero. No sales in Europe at all.”
Last December was the first major impact for Shiloh, he said. “December is usually a very good season for us in Europe and we had zero orders of wine,” explains Lourie, “our importers all told us the same thing, ‘listen, I don’t yet know what we have to do, what labeling we need to do [to make this work]’, so in the meantime they placed zero orders rather than risk the wine being held up; they don’t have the specific guidelines; it’s a simple business proposition. I’m waiting for the guidelines too.”
Like all of his fellow Israeli winemakers, Lourie remains defiant. “We are proud to be in Shiloh,” says Lourie, “we are hiding nothing; we say it on our labels in English and Hebrew. It [the EU labeling guidelines] hurts our business, for sure; it’s the current reality…but we’ve gone through more difficult things in life.”
Strong movements against the BDS have also appeared in many Jewish communities across the USA such as Young Israel of Teaneck or the Irving Place Minyan of Long Island. This past holiday of Purim, a number of congregations have encouraged their members to buy only Israeli products, including Elite Chocolate and Barkan wines. Rabbi Binyamin Krohn, of the Young Israel of Teaneck, said that there is no better time than Purim to show support for Israel.
Meanwhile, according to Dovid Perelman, CEO of the JCommerce Group, which owns both jwines.com and kosherwine.com online retailers, Israel’s wine sector has little to fear from BDS. “We don’t drink Israeli wines because we want to support Israel,” insists Perelman, “but because the wines are awesome, with great terroir, and interesting stories.”
According to Perelman, sales of Israeli wines are not only incredibly strong, but have been consistently strong every year. Most retailers indicate that Israeli wine makes up about 80% of the kosher wine marketplace in the US. Perelman insists this is “because of the quality, not because of the affinity for Israel.”
Whatever the reason, the export figures make clear that Israel’s wine industry continues to thrive, and is well poised to drown out the BDS haters.
By Joshua E. London
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