Russia ups export licenses, leaves Mlekpol out in cold

- Last updated on GMT

Related tags: Poland

More Polish dairy processors have been granted permission to export
to Russia, while Mlekpol, one of Poland's leading dairy companies,
has had its export license application rebuffed, along with around
forty other applicants, Tom Armitage reports.

Thirty-five dairy facilities were awarded licences allowing them access to one of Poland's most lucrative export channels, including three subsidiaries of Mlekovita (one of Mlekpol's main Polish competitors), together with Danone, Spomlek, Mlekovita, Monki, Hochland, Onden, Bel-Polska and Alima-Gerber.

Furthermore, a number of smaller dairy processors in Monki, Hajnowka and Piatnica in the Podlaskie province have been included on the export licence list, while Grajewo-based Mlekpol has been humiliatingly omitted.

Edmund Borawski, Mlekpol's CEO reportedly told the Polish News Agency (PAP)​, "this is very strange indeed, we were taken aback, as the inspectors didn't inform us of any irregularities"​.

The dairy company conceded that although an immediate appeal would not be possible, it would fully co-operate with any future inspections undertaken by the Russian authorities.

Conversely, Poland's Agriculture Minister Wojciech Olejniczak hailed the decision as a "good phase in Polish-Russian relations"​ - although he attributed the favourable outcome to increased dialogue between EU Health and Consumer Protection Commissioner Markos Kyprianou and Russian Agriculture Minister Aleksey Gordyeyev.

Russian veterinary authorities have demanded export licenses since 1 September 2004, after they alleged that Polish dairy imports did not comply with Russia's stringent health and safety standards (although this was widely interpreted as a thinly veiled attempt to slow the flood of dairy exports and protect its domestic dairy industry).

Following the loss of Russian export revenue, the burgeoning Polish dairy sector has become increasingly competitive and therefore less attractive to overseas investors.

Dutch dairy co-operative Campina, for instance, has already jettisoned its Polish production and distribution activities, claiming that the sites were no longer "financially viable".

Campina, however, attracted criticism that its withdrawal may have been somewhat premature, after Paris-based dairy conglomerate Danone (which generates one fifth of its Polish turnover through Russian exports) was granted permission for two of its dairy facilities to export last month.

According to market research analysts Datamonitor​, the Polish dairy sector grew by an estimated 6.7 per cent every year between 1998 and 2003, with the cottage cheese, kefir and yoghurt categories all showing strong growth potential.

Related topics: Markets, Emerging Markets

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