The impact of embargo

The impact of embargo

9 November 2020 News from the Company

Six years have passed since the food embargo was introduced in Russia in response to the Western sanctions. Over these years, the country has significantly strengthened its food safety. The import-restrictive measures have had a positive effect on the dairy industry.

Since 2014, Russia has reduced food import by a third: from 43 billion dollars in 2013 to less than 30 billion in 2019.

‘Through the hard work of our farmers and the efficiency of state support measures, the agricultural output has grown by 22%’, says Dmitriy Patrushev, Minister of Agriculture of the Russian Federation. ‘The farming sector has become one of the drivers of the Russian economy. All together we have managed to change the perception of agriculture from a non-profitable, risky industry to a modern, technology-intensive and high-return one. Today, when Russia – like the rest of the world – is facing the consequences of the global pandemic, agriculture acts as a donor of workplaces for other economy sectors, which were affected by the lockdown.'

The dairy industry has received a particular boost. Russia has started producing considerably more raw milk, thus increasing its self-sufficiency level to 80%. The import of dairy products has gone down drastically. As a result, domestic producers have been able to increase their output volumes and it has become easier to gain access to major retail chains.

‘The introduction of the embargo has had a great influence on milk processors’, comments Stefan Duerr, Chairman of the National Dairy Producers Union, President of EkoNiva Group. ‘The measure was highly helpful as it has enabled us to get closer to our customers. When Russian milk processors had to tolerate the cheap import of medium-quality products, it used to be much more difficult for them to get onto shop shelves with their goods. The embargo has solved the issue promoting faster and more efficient development of our production. The current Russian dairy products are quite competitive and deserve to occupy the prime shelf space!’

By Tatyana Ignatenko