Russia’s reality check

This year’s World Dairy Summit in Vilnius was, on the face of it, about sustainability. But the very location of the conference ensured discussion about Lithuania’s very large neighbour, Russia, and the impact of the EU dairy ban.

I felt bad for the editor of The Dairy News, Mikhail Mishchenko, at the summit. His explanation of the current dairy situation in Russia was a brave attempt to avoid politics, all the while sitting next to Andreii Dyken, president of the Ukrainian Association of Milk producers. At the end of the session, they were encouraged to shake hands and happily did so.

However, what Mishchenko was asking was a bit much in his speech. He encouraged companies to invest in Russia, rather than just exporting dairy products into Russia. He called Danone and PepsiCo “wolves” in the Russian market. Hmm, it seems to be that you can go it alone, but don’t shut out multinationals and then come back and ask them to invest in domestic production. It strikes me as having one’s cake and eating it too.

Kobus Mulder of South Africa seemed to have a better handle on what exporters can bring to the table when looking at emerging markets. He was asked about big companies setting up and exporting into West Africa, and he replied that he welcomes competition, because domestic companies can learn and improve their own products, in response to the competitive climate.

So, Mishchenko was kind of put on the spot about the embargo, but he hoped that relations between Russia and her neighbouring countries would be good. He also predicted that the embargo will last until 2018. If that does occur, I am not sure it will be beneficial for either Russia or her trading partners. A locked door does not encourage communication.

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