Britain’s Cooperative Group's decision to boycott produce exported from illegal Israeli settlement sparked outrage amongst Israeli officials, several media reported.

Officials say the ban will have an adverse effect on the Israeli products. Israel's foreign ministry strongly criticized the company’s decision saying that it is targeted at the entire occupied territories and not only the settlements.

"They say they are targeting settlement products, but in fact they are targeting everything that is Israeli," foreign ministry spokesman Yigal Palmor told AFP.

"The settlements are a pretext. The boycott, divestment and sanctions movement boycotts everything that is Israeli," he added.

Co-op, one of the biggest supermarket groups in Europe, announced its decision last week to stop doing business with four Israeli companies that export crops from illegal Israeli settlements. The companies include Agrexco, Arava Export Growers, Adafresh as well as Israeli regime’s largest agricultural export company, Mehadrin.

Doing so the company extended its existing policy which consisted of not sourcing produce from illegal settlements that have been built on Palestinian territories in the West bank. Co-op have vowed a new policy of "no longer engaging with any supplier of produce known to be sourcing from the Israeli settlements".

The group thus halts £350,000 worth of trade.

According to pro-Israel blogger Elder of Ziyon interviewed by the Jerusalem post, the move will also harm Palestinians farmers as they use Agrexco to export their produce.

The Guardian quoted Hilary Smith, Co-op member and Boycott Israel Network (BIN) agricultural trade campaign co-ordinator, who said the Co-op "has taken the lead internationally in this historic decision to hold corporations to account for complicity in Israel's violations of Palestinian human rights we strongly urge other retailers to take similar action."