Russia food ban to ‘benefit no one’ - Lakeland chief

Seamus Enright

While the agri-import ban introduced by Russian president Vladimir Putin is expected to affect Ireland to the tune of just €8m, Lakeland Dairies CEO says the greatest issue will arise when EU food markets are flooded with cut-price surplus goods.
Coupled with an end of quotas next year, and a potential return to the milk lakes and butter mountains of decades past, Michael Hanley warned that the EU needs to brace itself for the “bigger picture”, which may come to pass as a result of the year-long sanctions being imposed.

“There is no benefit for any European manufacturer as a result of this. There’s going to be a lot of collateral damage,” Mr Hanley told The Anglo-Celt. While Russia is not considered a major export destination for Lakeland’s goods, where Mr Hanley does see the Killeshandra-based company being affected is where other countries, more reliant on the Russian market, begin “dumping” cut-price, excess produce on others.
Russia announced last week it will ban fruit, vegetables, meat, fish, milk and dairy imports from the United States, the European Union, Australia, Canada and Norway. The ban will last for one-year, and is in sweeping response to Western sanctions imposed on Moscow over their alleged support for rebels in Ukraine.
Ireland is the 13th largest EU food exporter in terms of food and drink value and last year exported an estimated €4.5m worth of cheese to Russia alone. Minister for Agriculture, Simon Coveney, has said that impact was a “real worry”.
“What we’re going to see, at the height of all this, is a lot of short-term dumping,” Mr Hanley said. “The Dutch for instance sell a lot of cheese to Russia. The likes of Germany and Austria as well. There is going to be a lot of displacement, a lot of distressed product flooding in the markets as a result of this. It has to go somewhere, so it’s going to increase pressure on an already oversupplied situation.
“What we sell to Russia is relatively small in overall terms. But the effect we’ll see is in the collateral damage it’s going to do,” said Mr Hanley.
Meanwhile, Lakeland Dairies is proposing to carry out a number of major developments at its plants in both Killeshandra and Shercock, as the company prepares to cope with demands in countries where their market share is expanding.
Planning permission has been lodged with Cavan County Council in respect of the company’s plants at both Church Street, Killeshandra and Shercock Road, Bailieborough.
In Killeshandra, Lakeland hope to carry out alterations to the elevations of the butter plant, while in Bailieborough, plans of a much grander scale will see the erection of a five-storey extension to the existing dryer facility.