‘Food import ban harmful for both the EU and Russia’

Russia's neighboring countries such as Lithuania, Finland, and Denmark will suffer the most from the sanctions as their exports are largely dependent on Moscow, Lianne Van Den Boss food analysts at Euromonitor told RT.

RT:You are saying Germany will be hardest hit initially by what’s happening here, by these Russian countermeasures, but still will not suffer as much as other players, how do you think it’s all going to turn out then?

Lianne Van Den Boss: So in terms of actually the absolute losses that we are seeing here obviously Germany as Europe’s largest economy, and are one of the worst hit markets. However, if we are looking at the total exports of Germany to Russia, they are actually not that high, so [Berlin] is not that much relying on Russian imports. It is just a few percent of their total exports. Other countries, and mostly neighboring countries such as Lithuania or Finland, Denmark, it’s a much more important market for them. For example Arla has announced that because of the sanctions they are expecting redundancies in the biggest market in Denmark, because they are investing a lot in Russia at the moment, it is one of the fastest growing cheese markets. Obviously that is very important for Arla and we are expecting Russia to be the third largest cheese market in the next few years. So depending per country, the effects are more or less depending on the reliance on exports.

RT:Earlier you mentioned Finland. Well in a report last night, it said it would be hard hit and the prognosis is that it could take up to ten years for it to recover.

LB: I am not really sure about duration. It all depends on how long the sanctions are going to last. Obviously, both partners, both for the EU and for Russia, it would be much better for this ban to be lifted. In Russia, they are expecting prices [to grow]. In short term, they might actually not go up because they cannot really substitute all these products that quickly whilst in Europe we are seeing [where they are] obviously being over produced, and especially when it comes to fresh products, these need to find a destination market quite quickly.

RT:President Putin said the Russian ban will be in place for 12 months, Danske Bank said that might not be the case, if this plays slightly differently, but either each way, couldn't Europe see this coming?

LB: We have seen signs in the past. For example Polish pork has been banned and this was after discussions that Poland wanted heavier sanctions on Russia. Or the scene where the US chain McDonald’s, they were fined or sued by Russia because apparently they were not properly abiding with Russian health laws. So we are seeing signs and one could suggest that, indeed.

RT:Will the European firms really be allowed to trade in Russia again?

LB: You make a good point, especially if they are looking for new import partners in this case. Russian consumers might get used to brands that have been imported from non-embargoed countries. However this is rather short term. Over the long term, obviously consumer would still want to purchase cheese originating from France. In the long term I think this might go away, but in the short term it is definitely something to consider.