Swiss reap rewards as EU dairies locked out of Russia
AT the headquarters of Switzerland's Intercheese the phone barely stops ringing these days. A Russian voice is usually at the other end.
Since Vladimir Putin's government banned many food imports from Ireland and other nations supporting sanctions against Russia over its role in the Ukraine crisis, at least 14 Russian importers have contacted Intercheese.
Switzerland hasn't joined the European Union, the US, Canada, Australia and Norway in penalising Russia.
"Russian importers are looking for the cheeses they can't get from the Europeans anymore - Mozzarella, Gouda and Edam," said Daniel Daetwyler, managing director at Intercheese.
The company sold as much as 20 tons of cheese to Russia in 2013 and will increase sales to the country of the varieties most affected by the EU embargo, even though it won't be able to meet the demand, Daetwyler said.
Cheese is Switzerland's most important agricultural export and the country's neutrality is providing local producers with an edge in selling Gruyere and Emmental to 142.5 million Russians.
Swiss producers shipped 431 metric tons of cheese to Russia last year, according to the Swiss Customs Administration, just a fraction of the almost 63,000 tons exported globally.
If the embargo remains, it's possible we'll export more cheese to Russia," Jacques Bourgeois, director of the Swiss Farmer's Union, said.
"But Switzerland is a small country, we can't just double production from one day to another. If there's more demand, of course we'll have to see that we can deliver. We'll be pleased about every additional kilo we can export.
Border guards in Russia and Belarus have begun turning back trucks loaded with cheese, yogurt and meat, officials from Lithuania and Estonia said last week. The euro area exported more than 292,000 tons of dairy products to Russia last year, with the Netherlands providing almost a quarter, followed by Germany and France, according to Eurostat.
"The food-import ban has a rather limited effect on growth in the eurozone," Peter Vanden Houte, chief euro-area economist at ING in Brussels, said. "For some areas in the sector, oversupply could cause prices to drop."
According to Vanden Houte, there may be "some shifts towards Switzerland and it may profit from higher Russian demand as a substitute for European products -- but I doubt it'd be able to strongly increase production to meet the demand."
Emmental needs 120 days to ripen, while Gruyere takes six to nine months to mature. Forty-three percent of Swiss milk was used to produce cheese in 2013, according to industry data. (Bloomberg)