Russia moves to slash hard cheese imports

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Related tags: Cheese, Russia

Russia draws the wrath of the dairy exporting community, after
imposing a duty hike of more than 100 per cent on hard cheese
imports, Tom Armitage reports.

Russia's governmental commission for protective measures in foreign trade and customs tariff policy announced yesterday that import duty on hard cheeses would be raised from the current €0.3 per kg to €0.7 per kg.

"We are hoping that a government resolution will be signed before the summer, when companies start making cheese,"​ said Vladimir Labinov, head of the Dairy Union of Russia.

The tax import hike was prompted following a recommendation from the Milk Union of Russia and Roszhivotnovodsoyuz (Russia's union of livestock breeders), and will inevitably bolster the domestic retail price of cheese to around RUB70 (€1.95) - an increase of RUB20 (€0.56) on the current price.

According to Milk Union statistics, cheese imports have increased by around 33 per cent during 2003-4, while Russia's domestic cheese output has increased by the comparatively smaller figure of 15 per cent during the same period.

Conversely, the domestic cheese market is growing in the region of 20 to 25 per cent each year and in the last year alone over 525,000 tons of cheese were sold - 40 per cent of which were imported.

Roszhivotnovodsoyuz has lobbied the Russian government for increased duties for over two years now - although its initial objective was to increase the current 15 per cent duty to around 25 to 30 per cent.

The announcement will provide further strife for both hard cheese manufacturers and cheese importers, which comes only months after Russian authorities withdrew state subsidies for foreign cheese manufacturers - something which has increased the price of Edam and Gouda by approximately RUB15 and subsequently instigated a market slow-down.

But while the Milk Union claims that theses actions will help bolster investment across Russia's cheese production industry (French group Lactalis and German Hochland are the only two foreign manufacturers to have their own production facilities in Russia), critics have interpreted them as yet another thinly veiled attempt to slow the flood of dairy exports at the expense of foreign manufacturers.

Last year Russian veterinary authorities clashed with Polish dairy producers, after alleging that Polish imports did not comply with Russia's stringent health and safety standards.

Since, however, thirty-five Polish dairy facilities have been awarded export licences allowing them access to one of the country's most lucrative export channels.

Related topics: Markets, Emerging Markets, Cheese

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