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May 25, 2014

milk and cheese made in China

Some people have dubbed the sale of Tnuva to a Chinese company (Bright Food Group - owned by the Chinese government?) as the end of Zionism. It has been talked up as such all over the radio and other media in the latter half of last week.

I don't think it is the end of Zionism. Tnuva is not Zionism. Tnuva is a company. Tnuva is a company that makes profit and works to make profit. Tnuva might be one of the "landmarks" of Israel, of Israeli companies, but it is not Zionism.

As a matter of fact, the majority owner of Tnuva, the one that is selling to the Chinese, is not even Israeli. It is Apax Partners, a UK-based private equity and venture capital firm. They owned 56% of Tnuva. The rest of the shares are held by Israelis, the kibbutz movement and Shamir Foods, and they, for now at least, will continue to retain their partial ownership of Tnuva. So Tnuva is remaining just as much Israeli now as it has been until now.

I don't understand why the Israeli government will not be collecting any taxes off this sale. I understand that only the portion being held by foreign hands is being sold, but they should still be obligated to pay taxes in the local country in which the company operates.

Another thought - it seems not all "exits" are in the hi-tech industry...

One last comment, perhaps this will lead to the lowering of prices that people have been fighting about for so long.. First of all, it is the Chinese. Everything they make is cheaper. Second, with opening the market to the Chinese, perhaps the opponents to opening imports will now remove their opposition - maybe they no longer feel the need to protect a company that is not Israeli (even though it was not really Israeli before either)...

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