September 26, 2011 : Israeli government exporter Carmel-Agrexco forced into liquidation

admin's picture

Carmel-Agrexco, Israel's largest agricultural exporter, was ordered into liquidation on September 11th. The company had previously revealed a ?33 million loss and massive debts in March this year, which it attributed partly to losses in Europe. The target of diverse campaigns since 2004 for its trading of settlement goods, the company had lost business from several European supermarkets, including the Italian Coop chain, due to boycott pressures. Such damage to Israel's national exporter seemed impossible when campaigns against Agrexco began in 2004, and it is a testament to the continuing success of the BDS campaign.

Agrexco traded in fruit, vegetables and flowers. 30 per cent of the company was owned by the Israeli government, with a further 25 per cent owned by growers, including settlers, represented by Israel's production and marketing boards. The board of directors was dominated by government employees. The final 25 per cent was owned by the Tnuva cooperative.

Carmel-Agrexco was deeply involved in the trade of settlement goods. It had a regional office in the occupied Jordan Valley and worked with growers in most of the settlements there. During the trial of seven UK activists who had blockaded Agrexco's UK depot in 2004, Amos Orr, Agrexco's general manager, gave evidence that Carmel Agrexco marketed between 60 and 70 per cent of all agricultural produce grown in Israeli settlements. From Corporate Watch interviews with settlement workers who deal with Agrexco's produce in the Jordan Valley, it became evident that the company was complicit not only in land grabs and water exploitation, but also in profiting from illegal labour conditions. Agrexco traded under the brand names Carmel, Carmel bio top (organic produce), Alesia, Coral, Jaffa and Jordan Plains. It had subsidiaries in France, Italy, Germany and the US.

It is unclear, at the time of writing, what will become of these brand-names and which companies will take over Agrexco's export market. However, part of Agrexco's shipping network has already been taken over by Cosiarma, a company owned by the GF group. Cosiarma has chartered two vessels previously used by Agrexco and renamed them the Cala Pira and Cala Paradiso. They will sail regularly from Haifa to Ashdod and from there to Sete and Genoa.

When the extent of Agrexco's financial troubles was revealed, the Israeli state, which owned 30 per cent of Agrexco, refused to bail it out, presumably due to the nascent neoliberal consensus in Israel, forcing the company to search for bidders. Agrexco issued tenders for the sale of the company, valued at between ?120 and 160 million. Total Produce, an Irish agricultural exporter, was one company that purchased a tender. In response the Palestinian BDS national committee wrote to the company warning that purchasing Agrexco would deem the company complicit in Israel’s violations of international law, and make it a legitimate target for legal action and popular boycotts.” Total Produce ultimately opted not to make a bid for Agrexco.

At the last moment an Israeli company, Kislev Forwarding and Customs Clearing Ltd, owned by Zvi Grinberg, offered NIS190 million for Agrexco but this was not enough to save the company and on September 11th 2011, Tel Aviv District Court ordered Agrexco's liquidation.

As respected Israeli economist Shir Hever has noted, the European-wide campaign against the company was among the factors that led to the company’s downfall. Hever said: “the company has been found to produce misleading reports, and did not warn its investors of the possible impact of the BDS campaign to boycott the company products. Many farmers have left the company, opting to work with competing ones which have not yet been at the focus of the BDS campaign, and as a result Agrexco entered a liquidity crisis. Several companies have considered bidding to buy Agrexco, but have withdrawn their bids after a brief research, which has no doubt uncovered the company’s prominence in the BDS campaign.”

The Palestinian Boycott, Divestment and Sanctions National Committee (BNC) has called on the movement to target companies which “purchase Agrexco assets and brand names or seek to replace the company as the primary Israeli agricultural exporter.”