A fifth of Israeli exporters report drop in demand as footage of Gaza attacks changes behaviour of consumers and investors

This article is more than 11 years old

This article is more than 11 years old

Israeli companies are feeling the impact of boycott moves in Europe, according to surveys, amid growing concern within the Israeli business sector over organised campaigns following the recent attack on Gaza.

Last week, the Israel Manufacturers Association reported that 21% of 90 local exporters who were questioned had felt a drop in demand due to boycotts, mostly from the UK and Scandinavian countries. Last month, a report from the Israel Export Institute reported that 10% of 400 polled exporters received order cancellation notices this year, because of Israel's assault on Gaza.

"There is no doubt that a red light has been switched on," Dan Katrivas, head of the foreign trade department at the Israel Manufacturers Association, told Maariv newspaper this week. "We are closely following what's happening with exporters who are running into problems with boycotts." He added that in Britain there exists "a special problem regarding the export of agricultural produce from Israel".

The problem, said Katrivas, is in part the discussion in the UK over how to label goods that come from Jewish settlements in the occupied West Bank. Last week British government officials met with food industry representatives to discuss the issue.

In recent months, the Israeli financial press has reported the impact of mounting calls to boycott goods from the Jewish state. Writing in the daily finance paper, the Marker, economics journalist Nehemia Stressler berated then trade and industry minister Eli Yishai for telling the Israeli army to "destroy one hundred homes" in Gaza for every rocket fired into Israel.

The minister, wrote Stressler, did not understand "how much the operation in Gaza is hurting the economy".

Stressler added: "The horrific images on TV and the statements of politicians in Europe and Turkey are changing the behaviour of consumers, businessmen and potential investors. Many European consumers boycott Israeli products in practice."

He quoted a pepper grower who spoke of "a concealed boycott of Israeli products in Europe".

In February, another article in the Marker, titled "Now heads are lowered as we wait for the storm to blow over", reported that Israelis with major business interests in Turkey hoped to remain anonymous to avoid arousing the attention of pro-boycott groups.

The paper said that, while trade difficulties with Turkey during the Gaza assault received more media attention, Britain was in reality of greater concern.

Gil Erez, Israel's commercial attache in London, told the paper: "Organisations are bombarding [British] retailers with letters, asking that they remove Israeli merchandise from the shelves."

Finance journalists have reported that Israeli hi-tech, food and agribusiness companies suffered adverse consequences following Israel's three-week assault on Gaza, and called for government intervention to protect businesses from a growing boycott.

However, analysts stressed that the impact of a boycott on local exporters was difficult to discern amidst a global economic crisis and that such effects could be exaggerated.

"If there was something serious, I would have heard about it," said Avi Tempkin, from Globes, the Israeli business daily.

Israeli companies are thought to be wary of giving credence to boycott efforts by talking openly about their effect, preferring to resolve problems through diplomatic channels.

Consumer boycotts in Europe have targeted food produce such as Israeli oranges, avocados and herbs, while in Turkey the focus has been on agribusiness products such as pesticides and fertilisers.

The bulk of Israeli export is in components, especially hi-tech products such as Intel chips and flashcards for mobile phones. It is thought that the consumer goods targeted by boycott campaigns represent around 3% to 5% of the Israeli export economy.