The Shmittah Effect


When it comes to Israeli kosher wine, there is one major issue that springs forth every seven years: shmittah (from the Hebrew root word meaning “to let go” or “release”).

The Torah mandates that every seventh year be designated as a rest or sabbatical for the Land of Israel itself, and the land is to lie fallow and agricultural cultivation is forbidden. Just as every seventh day of the week is the Sabbath and is considered holy for the Jewish people, so too every seventh year is considered holy in the Land of Israel.

The seventh-year produce is thus imbued with an additional level of holiness known as kedushas shviis (“holiness of the seventh”) because the “seventh” or shmittah year is considered sanctified to God. While kedushas shviis is considered a positive dietary staple, it is also subject to additional restrictions and regulations (it cannot be wasted, for example). Today the laws of shmittah are considered a rabbinic mandate, but the economic challenge remains.

According to Eli Ben-Zaken, founder and winemaker of Domaine du Castel, “Shmittah is quite a difficult issue for wineries in Israel because it’s obviously not a very economically viable thing to simply stop for the year.”

As Amichai Luria, winemaker at Shiloh Winery, notes: “Shmittah is a big challenge, and it’s not just me saying it, but also Chazal — [Hebrew acronym for “Our Sages of Blessed Memory”] — said it’s a big challenge; Chazal called the people who do observe shmittah properly ‘gibborim’ ‘heroes,’ as it says — “Gibborei koach osei devaro” [“mighty heroes who do His word” from Psalms 103:20; Midrash Rabbah, Leviticus 1:1 interprets the Psalmist’s words as reference to those who observe Shmittah].

The government of Israel also agrees. As Menahem Hesse, minister of agriculture and science at the Israeli embassy in Washington, put it: “Shmittah is a major issue not just for the State of Israel to manage, obviously, but also for the market and for individual growers, in this case, vineyards and wineries, to manage, to deal with and to plan for — and from the first year, even, not just the seventh year. It is a known, structural element; it’s not coming out of nowhere.”

So what does shmittah mean for the Israeli wine industry?

Shmittah first became a substantive issue for the modern Israeli wine industry in the late-19th century, notes Adam Montefiore, the wine development director of Carmel Winery, Israel’s largest wine producer; this happened, he says, when Baron Edmond de Rothschild effectively “reintroduced a wine industry in the Holy Land for the first time in 2,000 years.”

“There were great debates,” says Montefiore, “between those strictly religious who chose to observe the shmittah year exactly as written in the Bible, and those who were less religious, who looked for practical ways to circumvent the ruling, fearing the economic consequences. The debates and arguments continue until today.”

This 19th-century crisis led directly to the then new rabbinic solution known as heter mechira (“permission to sell”). This entails the temporary sale of Jewish-owned lands in Israel to non-Jews under the supposition that the transfer of ownership removed the prohibitions of shmittah, thereby enabling agricultural activity to continue without restriction.

From its inception heter mechira was considered a necessary evil of sorts, was hotly debated, and although still in wide use today, it remains very contentious.

The most popular alternative solution to heter mechira, particularly when it comes to wine production, is known as “Otzar Beis Din” (“storehouse operated by a rabbinical court”).

As Ed Salzberg, chief winemaker at Barkan Winery, Israel’s second largest producer, explains, “a beit din organizes people to care for the fields, harvest the crops, produce the wine and bottle it. … Halachically there is no buying and selling of fruit or wine here; rather, people [are] being paid by the beit din for their time and effort by people who haven’t the ability to do it themselves.” Of course, the people hired by the rabbinical court are the very same grape growers, winemakers and laborers who do the work during the non-shmittah years. So this is a very attractive option for some.”

“All of these are loopholes in the law,” notes Rabbi Dr. Berel Wein, the prolific scholar and public speaker, during a lecture on the current shmittah.

“Shmittah affects kosher Israeli wineries in many ways,” notes Salzberg, and wineries must choose to either rely upon one of the rabbinic solutions allowing them to work around shmittah, or instead embrace shmittah and simply not work with Israeli produce. Additionally, he notes, “this year a government-sponsored program is being tried where farmers receive a payment from the wineries for not harvesting.”

According to Hesse, the agriculture minister, “about 25 million shekels will go to subsidize those grape growers who will fully observe shmittah. It is not huge compensation, but it helps offset the losses. We also issue guidelines to growers… to help them improve their produce for the future.” Also, notes Hesse, “the Israel Grape and Wine Council have introduced a new scheme for cooperation between growers and wineries — so that every dunam [unit of land] that will not be cultivated during shmittah will also be compensated in some limited amount by the wineries themselves.”

“The last numbers I heard,” noted Victor Schoenfeld, head winemaker of GHW, “is that some 3,000 acres of Israeli vineyards will be subsidized and not harvested, which is close to a quarter of the total vineyard acreage. In our vineyards, a negligible number of acres are participating in the program.”

“This shmittah will be interesting,” says Gabriel Geller, a Jerusalem-based Israeli wine expert and industry consultant, “as it seems that many more wineries than in 2008 [the last shmittah year] won’t make any wine at all this time.”

“It might have a positive impact on the industry overall,” muses Geller, “since several wineries are facing difficulties selling their wines and getting rid of their older stocks. Skipping this coming harvest might allow them to focus on selling out the previous vintages.”

Lewis Pasco, winemaker of the Pasco Project and consultant to the Beit El Winery, struck a more sobering note: “It’s going to be a struggle. … But look, the wine business always has people struggling — a certain percentage of the producers will always be struggling and have cash-flow issues — it’s a tough business to begin with. It’s not like everyone is making a fortune interrupted only by shmittah. The wine business is not a guaranteed thing by any measure, but then that’s not why most of us are in it. That’s not what it’s about.”

While usually the diaspora Jewish communities are a source of support and encouragement, during shmittah things are different. “It seems,” notes GHW’s Schoenfeld, “that the U.S. kosher market is the most reactionary regarding wines in the shmittah year.” For one thing, the economic argument driving the heter mechira leniency does not apply to the economic realities of American life, so Orthodox kashrus agencies tend towards stringency on the issue.

“Since the different shitot [halachic opinions] are far from achieving consensus on shmittah,” says Gabriel Geller, “the U.S. certifications do not want to take the risk and be seen as too lenient for many of their customers — who wouldn’t touch shmittah wine anyway.” As Rabbi Aharon Haskel, director of Israel operations for the U.S.-based OK kashrus agency, put it: “Seeking leniencies for shmittah is not our way.”

Further, most rabbinic authorities seem to agree that, as Barkan’s Salzberg succinctly put it, “Sabbatical wines should be consumed [only] in Israel, therefore, there is essentially no export.”

“We miss all the export markets,” agrees Gil Shatsberg, head winemaker of the Recanati Winery, one of Israel’s 10 largest producers. “The U.S. and France will not take Shmittah wines,” laments Shatsberg, “and usually 20 percent of the Recanati production is for export, so for Shmittah we simply need to prepare with a large enough stock of shanat shishit (“sixth year,” i.e., from the vintage before shmittah) to provide into the sabbatical year. So we try to control the economic impact.”

Seemingly alone in the industry, however, the Golan Heights Winery (GHW) does export its Shmittah wines, and intends to continue do so based on a halachic ruling by Rabbi Avraham Dov Oyerbach of Tiberias, the kosher certifier of GHW. Even though the US certification that usually accompanies these wines is dropped from the label for the Shmittah vintage, wines sales seem unaffected.

Justin Kohn, export manager of Tabor Winery, another of Israel’s 10 largest producers, helps put all of this into some perspective. “Keep in mind,” Kohn says, “that the 2015 shmittah vintage won’t hit the market for some time — at least a year. It is true that Tabor will not be exporting to the U.S., France or the U.K., because our importers there are very strong in the kosher market. For Kohn, as for so many others, the key is simply to plan ahead. Indeed, says Kohn confidently, “Shmittah shouldn’t really impact us or our consumers; we simply won’t have the 2015 vintage in that mix.”

As Recanati’s Gil Shatsberg notes, “In general, this is good for the industry and helps some of the players clear out their inventory. It shouldn’t have any real impact on the overall supply and demand.”