An Israeli parliament committee opposed a plan to sell Tnuva, the country's largest food maker, to China's Bright Food company on Tuesday, calling on the government to stop the sale.
Bright Food, China's second-largest dairy and consumer products company, has begun its investment investigations on Tnuva, following a few months of negotiations with the British private- equity Apax, which controls Tnuva.
The deal reportedly put about a 2.5 billion U.S. dollar-value on Tnuva.
"Diplomatic relations and trade with China are vital," said parliament member and Chairman of the Economy Committee, Avishai Braverman, during an "emergency discussion" he summoned on the sale. "However, Tnuva is an Israeli resource hence it should be kept in Israeli hands."
Afraim Halevi, ex-chief of the Israeli spy agency Mossad, said that the sale "is wrong and will put the country's food security at risk."
The conglomerate controls more than 70 percent of the Israeli dairy market and owns some of the most popular food brands in this country.
Established in 1926, Tnuva is Israel's largest producer, buyer and distributor of agriculture produce. It was formed as a cooperative owned by some 620 Kibutzim and Moshavim (communal farms,) which are also suppliers of Tnuva's milk. In 2007, its members approved the sale of 56 percent to Apax and another some 20 percent to the Israeli Mivtach-Shamir. The farmers were left with 23 percent of the shares.
"Tnuva was built as part of the Zionist ethos which established the state of Israel," said Shelly Yehcimovich, a parliament member and previous leader of the opposition and Labor Party. "But its potential buyer isn't interested in the Israeli cowmen, workers or consumers but with Tnuva's innovations and patents," Yehcimovich added.
She noted that Tnuva's acquisition by Apax led to a price-hike on cottage cheese and other products, which triggered nationwide public protests in the summer of 2011.
"We can fix the mistake of letting foreigners control Tnuva in the current round," Yehcimovich said.
The parliament members called on Israeli Prime Minister Benjamin Netanyahu and the government to interfere with the negotiations and ban the sale.
Such interference would not be entirely unprecedented. Last April, Minister of Finance Yair Lapid announced that he would oppose a proposed sale of Israel Chemicals to Canadian Potash, and would refuse to authorize such a deal. A short while afterwards, Potash dropped its takeover bid.
To prevent the Tnuva sale, the parliament's Economy Committee proposed on Tuesday a new measure to regulate sales of major Israeli firms to foreign companies, saying a new governmental committee should be created to decide whether such acquisitions contradict the interests of the Israeli public.
On Monday, dozens of farmers demonstrated against the acquisition talks outside the office of Apax-Israel in Tel Aviv.
Seeking to calm the farmers, Apax-Israel CEO Zehavit Cohen said that Bright Food is committed to the development of Tnuva and did not intend to import cheese to Israel.
