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Embargo hit FrieslandCampina exploring alternative markets for cheese

Embargo hit FrieslandCampina exploring alternative markets for cheese

Dutch dairy giant FrieslandCampina is "exploring" alternative markets for its cheese to offset the impact of the Russian embargo on European Union (EU) food products.

FrieslandCampina, the Netherlands' largest dairy processor, has "taken measures" in the last week to counter the effect of the Russian embargo announced by Russian Prime Minister Dmitry Medvedev.

Russia slapped a ban on the import of beef, pork, fruit, poultry, cheese and milk from the EU, US, Australia, Canada, and Norway earlier this month.

FrieslandCampina's Frico cheese range is popular in Russia.

EU Member States exported around 250,000 tonnes of cheese worth approximately €980m (US$1.3bn) to Russia in 2013, according to UN trade data. Cheese makers in the Netherlands accounted for nearly a quarter of this figure, exporting around 60,000 tonnes of cheese worth approximately €232m (US$308m) to Russia last year. 

FrieslandCampina sold around €190m (US$250m) worth of dairy products, including yogurt, cheese and infant formula, in Russia in 2013 - 1.66% of its total 2013 revenue. Cheese accounted for the majority of FrieslandCampina's Russian revenue.

In response to the embargo, FrieslandCampina brought the production of cheese manufactured specifically for the Russian market to a halt, and cheese primed for export to the country has been distributed in other markets.

The Dutch dairy giant is now seeking a medium-term solution to the loss of trade.

Jan-Willem ter Avest, spokesperson, FrieslandCampina, told that the Dutch dairy is now seeking opportunities outside the Netherlands to offset the damage done by the Russian embargo.

“To minimize the consequences in the medium term FrieslandCampina will explore alternative markets,” said ter Avest.

It also plans to increase milk powder production to "provide relief for the cheese market," he added.

He declined, however, to speculate on the exact impact of the Russian embargo.

“It is much too early to say how much of our exports will be impacted," said ter Avest. “It depends on how long the boycott will last."

"The cheese that cannot now be exported to Russia has for the most part been sold in other markets. And as I said before, to mitigate the medium-term impact as far as possible, FrieslandCampina is investigating alternative sales markets.”

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