Seismic shifts
Aerial view of the Ukrainian flag waving in the wind against the city of Kyiv, Ukraine near the famous statue of Motherland at sunset.
This has two weeks for world upheaval, or rather, since 24 February when Russia’s president decided to invade its peaceful neighbour, Ukraine. I think a lot of that so far is, how’s that working out for you, Vlad? In a way, he’s miscalculated because it’s not Syria, where there was already a civil war underway and also had a murderous leader. Nor was it Crimea, where they could engage in low-level operations and still keep control of it. It’s a bigger event than the occasional murder of some dissident in a foreign country, or the supply of arms to insurgents, or cyberattacks on companies and systems.
As long as he kept it quiet, the west seemed to be ok with Putin’s criminal activities over the last decade or so, or at least not troubled enough to make him feel any real economic pain. Plus, there was all that gas and oil to be had, and Russian oligarchs buying lots of nice things There was a trade-off, but I think with people like Putin, they always think it is weakness rather than strength that drives most people’s desires to not live in conflict.
Economic sanctions will bite this time, I suspect. The moves by Elopak (1) to stop operations in Russia are just small efforts in the larger scheme, where Russia’s day to day life is impacted negatively. Meanwhile, Fonterra (2) has suspended its exports to Russia as well.
It will be interesting to see what Danone and PepsiCo do in the country, as they run about 15 per cent of Russia’s dairy output (3). Currently, Danone has stopped investing in Russia but continues to supply it with dairy products (4). PepsiCo of course owns Russian dairy Wimm-Bill-Dann.
In the global dairy industry, we’ve long dealt with Russian sanctions on things like EU cheeses such as a feta, mozzarella and brie (5). Now the country is set to increase dairy imports from countries such as Georgia and Turkey (6).
I think we’re all aware now. The bravery of Ukrainian people in fighting Putin’s oppression has had such far-reaching effects. As Ukrainians head west to safety, Russians are leaving their own country too. Turns out they don’t want to live in a giant version of North Korea. Who can blame them?
- Suzanne Christiansen, editor, Dairy Industries International.
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1. www.dairyindustries.com/news/39736/elopak-suspends-operations-in-russia
2. www.rnz.co.nz/news/business/462436/fonterra-suspends-shipments-to-russia
3. www.dairyglobal.net/industry-and-markets/market-trends/how-the-dairy-market-in-russia-is-developing
