Polish dairy sector struggles against Russian ban

- Last updated on GMT

Related tags: Dairy, Milk

Poland's dairy producers are struggling to come to terms with the
retraction of all export licences to Russia, a key market for
yoghurt and other refined dairy products.

All licenses to export food and beverages to Russia were revoked from 1 September, a decision that has particularly hit the export of chilled and perishable goods hard. Already the meat industry has been heavily impacted by the ban and is in discussions with the Russian veterinary services to have new export licenses approved.

This follows on from Russian inspectors visiting some 80 meat processing facilities to assess their suitability for export last week. Of those establishments visited only 16 were granted export licenses, a decision that is now causing great concern for the dairy sector, which in turn is expecting inspections during the course of next week.

"The dairy industry is worried about the outcome of the inspections,"​ said Robert Gasek, spokesman for the Polish Association of Private Dairy Processors. "Similar to the number of meat processing facilities that were inspected by the Russian authorities, we understand that 81 dairy facilities will be assessed. We believe that, following last week's meat inspections, it is highly possible that a similar number of dairy facilities will be approved by the Russian authorities."

For both the dairy and the meat sector the ban on Russian exports has meant considerable losses. Gasek points out that production has had to be maintained at previous levels, which is now leading to a backlog of products that is all having to be stored in chillers to prevent it going off. Dairy processors say that not only are they losing out on export income, they are also incurring the additional cost of chilling all the surplus produce.

Russian inspectors arrive in Poland on Monday, from which time they will be carrying out comprehensive checks on the 81 dairy producers. Gasek also points out that comprehensive checks will also be made on companies providing refrigeration services for dairy products. "The Polish dairy industry believes that these inspections are a costly waste of time,"​ Gasek told CEE-FoodIndustry.com. "The industry has already invested significant time and money to comply with the high standards sort by the EU authorities during Poland's accession process. This move by the Russian authorities is unfair and unjust."

Danone became the first major dairy player to be affected by the export ban when a consignment of nine lorries carrying cream cheese was stopped by Russian customs official last week. Only after lobbying by Polish ministers were the lorries allowed to continue to their destinations. Currently Danone says that around 20 per cent of its cream cheese production in Poland is exported to the Russian market.

Although Russian exports account for a significant proportion of total dairy exports, Poland's dairy industry has definitely seen worse times. Currently counteracting the loss of the Russian export market is the still-growing EU export market. In the first six months of the year dairy exports grew by 60 per cent to reach a value of €235 million.

Related topics: Markets, Emerging Markets

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