CHEMICAL BANS AFFECTING SANITARY STANDARDS AT WEST

C O N F I D E N T I A L SECTION 01 OF 02 JERUSALEM 000860

SIPDIS

NEA FOR FRONT OFFICE AND NEA/IPA, EEB FOR EBA/CBA, NSC FOR
SHAPIRO/KUMAR, TREASURY FOR MOGER, JOINT STAFF FOR LTGEN
SELVA

E.O. 12958: DECL: 05/27/2019
TAGS: ECON ETRD BEXP EAGR PREL KWBW IS
SUBJECT: CHEMICAL BANS AFFECTING SANITARY STANDARDS AT WEST
BANK DAIRIES

REF: JERUSALEM 516

Classified By: Acting Principal Officer Greg Marchese for reasons 1.4 (
b),(d).


1. (C) Summary: Israeli restrictions on chemical imports
have led to a reduction in product sanitary standards at West
Bank dairies, posing a food safety concern as well as
affecting Palestinian businesses. At least three major West
Bank dairy companies can no longer obtain chemical sanitizing
agents for paper milk cartons, raising concerns about the
safety of milk supplies, particularly in Gaza. End summary.


2. (C) Three major dairies in the West Bank report they are
unable to import an essential sanitizing agent for
production. Al-Juneidi (the West Bank's largest dairy) and
Al-Jebrini (the second largest) and Al-Safa all use
"TetraPak" packaging technology that, according to the
Swedish manufacturer, requires a specific concentration of
hydrogen peroxide (35 percent). The hydrogen peroxide coats
and sanitizes the paper packaging material. In 2008, the GOI
began refusing Palestinian companies' applications to import
hydrogen peroxide at the required concentration, citing
security concerns. The GOI suggested it would allow imports
at a lower concentration (17 percent),but Palestinian
companies say the lower concentrations violate TetraPak
equipment sanitary standards.


3. (C) Note: The same ban has caused the National Beverage
Company (NBC),the West Bank's Coca-Cola franchise, to shut
down a juice line that accounted for about half of the
company's total juice production (reftel). NBC's General
Manager told EconOff that the company shut down the line to
avoid compromising Coca-Cola's strict sanitary standards.
NBC CEO Zahi Khouri told a US Congressional delegation on May
26 that the GOI has suggested he move his juice packing line
to a settlement to resolve his import problems. End Note.


4. (C) Al-Jibrini Dairy General Manager Jihad Jibrini told
EconOffs during a May 19 visit that his company installed the
TetraPak equipment in its Hebron facility in 2007 and
obtained 35 percent hydrogen peroxide from an Israeli
supplier without difficulty until about six months ago.
Since then, the GOI has allowed the dairy to import only
lower concentrations. Clearly uneasy about discussing the
matter, Jibrini said the dairy is now using the lower
concentration to sanitize its milk packages. He admitted,
"We don't know what will happen," but, given the alternative
of shutting down milk production, the company decided to take
the risk. The TetraPak lines, he said, account for about 30
percent of the company's entire production.


5. (C) Jibrini said his concerns about milk safety are
growing as the weather turns hotter. He noted that milk sold
to Gaza, for example, can be exposed to the sun for extended
periods of time during back-to-back transfers at West Bank
and Gaza border crossings, seriously affecting the milk's
quality. He added that the GOI has also refused to allow
imports of nitric acid used to clean steel pipes in dairy
equipment.


6. (C) Al-Juneidi Dairy Director General Mashour al-Juneidi
told EconOff on May 27 that his company, the West Bank's
largest dairy, also installed a USD 3 million TetraPak
packaging line in 2007 and used 35 percent hydrogen peroxide
mix for about a year before the GOI refused to allow it. He
said the dairy decided to continue production with a 17
percent concentration.


7. (C) To address safety concerns, al-Juneidi said the
company installed computerized quality monitoring equipment
and special high-heat testing rooms in its Hebron factory.
He noted that milk samples periodically fail testing
procedures with excessive levels of bacteria, and that the
dairy frequently has to suspend production when product
quality alarms go off. Al-Juneidi said he continues to
appeal to Israel Defense Forces officials to permit imports
of 35 percent hydrogen peroxide. Like Jibrini, he expressed
concern about quality degradation of milk sold to Gaza from
sun exposure during back-to-back transfers at the border
crossings.


8. (C) Jibrini and al-Juneidi said that Al-Safa Dairy in
Nablus, which is operated by the Ministry of Awqaf (Religious
Affairs),is experiencing similar problems.

JERUSALEM 00000860 002 OF 002



MARCHESE