An EU decision over wine could have a big impact on the Israeli-Palestinian conflict

Israeli human rights workers fear that if bottle-labelling rules are modified it will ‘normalise’ Israeli settlements and signal the further erosion of the chances for a two-state solution

A volunteer carries grapes in an Israeli settlement vineyard in the West Bank (Nir Elias/Reuters)

A battle over wine bottle labels in the European Union’s top court seems a world away from the decades-long Israel-Palestine conflict and likely not very relevant.

But on the 12 November, the supreme court in Luxembourg is expected to make a decision which could have serious repercussions here.

At the heart of the legal battle is medium-size winery and its vineyards located atop a hill within an Israeli settlement, which is illegal under international law and built over swathes of privately-owned Palestinian land in the occupied West Bank.

Psagot winery is pulling out all the stops to cancel EU regulations imposed in 2015, that require member states to specifically label products as coming from Israeli settlements in the West Bank, rather than being made in Israel proper.

Psagot’s wealthy Israeli owner Yaakov Berg, who moved to the West Bank from Russia when he was three years old, in an interview with The Independent claimed the EU rules are discriminatory against Israel, politicised and designed to encourage a boycott of his products and so the country. This is despite the fact that neither the EU nor the United Nations recognise Israeli settlements within the West Bank as being part of Israel.

The Independent revealed that the winery is bankrolled and even partially owned by US duty-free tycoons, the Falic family, who are majority shareholders in the Panamanian company.

Al-Monitor has now reported that the winery (likely the Falics) has hired Covington & Burling, one of the US’s leading law firms that routinely employs former government officials, to take that fight on and provide “strategic advice and engagement” on the impact of the proposed regulations.

A lead lobbyist on the account, former US ambassador to the EU, Stuart Eizenstat, told the news website the firm plans to go straight to the top: lobbying US policymakers that the current rules violate World Trade Organisation (WTO) regulations.

If they can prove this, Europe’s top court will be unable to do much but back down.

“I really can’t get into strategy, but I would just say that we think that the regulation violates WTO requirements, TBT [technical barriers to trade] regulations,” Eizenstat told Al-Monitor. He added, “It’s not an appropriate use of regulations which were designed for safety and health food products, not for political products.”

The details of what is written on a wine bottle label at first glance does not seem particularly important. But it clearly is to the likes of the Falic family who invested over a million dollars in the winery and are likely footing the bill of the expensive legal battle.

According to Israeli human rights workers and settlement researchers the bottle-label fight is actually key and part of a bigger story of the steady collapse of a two-state solution to the Israeli-Palestinian conflict.

They argue the more Israeli settlements on Palestinian land are “normalised” as being part of Israel, the harder it will be to create a viable Palestinian state.

Dror Etkes, an Israeli researcher who has spent two decades monitoring the Israeli settlement enterprise and heads up watchdog Kerem Navo, says if the court cancels the labelling requirement it would mean the EU is green lighting the right of Israel to “loot land in the West Bank”.

Not mincing his words, he told The Independent: “It normalises settlements. It’s important that people can decide whether they want to purchase goods that these criminals produce.”

So far is unclear if the winery’s decision to hire some of the US’s top lawyers will change anything.

The European court’s advocate general Gerard Hogan was pretty forceful in his opinion on the case ahead of the final ruling, recommending that the EU keep the regulation, saying the settlements are a “manifest breach of international law”.

In an investigation by this news organisation into the winery, Israeli officials confirmed some of Psagot’s vineyards, the Berg’s own home and their swimming pool were located on private Palestinian land just a 15 minute drive from Jerusaelm and are in fact illegal even under Israeli law.

In 2003 the Israelis themselves issued a demolition order against Mr Berg’s home (order number 252/03) although the order has yet to be enforced.

These details are also verified by logs belonging to the Coordinator of Government Activities in the Territories (Cogat), the Israeli security unit which oversees civilian issues between Israel and the Palestinians.

These points have, however, had no impact on the winery’s ability to operate and export. Mr Berg, meanwhile, argues the EU labelling regulations are discriminatory

Could hiring the likes of Covington & Burling be a game changer to convince Europe? It is yet to be seen. The Falics, among the largest donors to Benjamin Netanyahu’s past campaigns, are immensely powerful and unlikely to back down.

According to Al-Monitor all three brothers donated $20,000 to the Republican National Committee on election day, 2016. In February next year, the news outlet says the family will be hosting their annual charity golf tournament at Donald Trump’s Florida course for the third year in a row.

That is quite some weight, but we will see where the case ends up.