Latviski English По-русски
Ceturtdiena 27.10.2016 | Name days: Lilita, Irita, Ita

Latvijas piens: dairy industry is a mirror of our nation’s weakness

(No Ratings Yet)

Latvia has the most fractured dairy industry in Europe, which only serves to weaken its competitiveness. Companies are already allocating whatever resources they have to conquer export markets, said Latvijas piens Chairperson Anita Skudra in an interview to BNN.

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUWhat are some of the most notable recent events in your sector?

The moment that changed the situation in the dairy industry came when Russian announced its embargo on imports of European dairy products. This decision is the core of the crisis situation. Its result can be described with over-production of dairy products on global markets. The cancellation of milk quotas that followed in Europe from 1 April and onward only increased tension, causing a significant drop in prices around Europe and the world. Dairy industry’s experts say this situation is unprecedented – prices have gone to an all-time low in the past ten years. In this difficult time the primary question to ask is this – do we, dairy companies in Latvia, have a strong foothold in Baltic States, Europe and elsewhere in the world? The answer, unfortunately, is not optimistic at all: we have the most fractured dairy industry in Europe, which significantly weakens our competitiveness. It is impossible to consolidate resources to achieve a common goal, like exploring a new export market. Currently all companies are spending whatever resources they have to conquer export markets.

Can you say economic conditions are improving and there is a lot of potential for economic growth in the market?

No, the situation in the industry remains critical.

How would you describe the government’s economy policy aimed at improving the economic situation in the country?

We cannot deny the efforts the government puts into improving the situation in the industry. However, we have to admit that this ‘fire-fighting method’ will only ensure the overall survival of the industry. Yes, support has been provided to farmers. We have also seen measures aimed to help with exports – participation in international exhibitions. Experts say the situation is incredibly complicated. It is not something that can be resolved in a short period of time. It is closely tied to developments in Europe’s dairy industry. Latvia’s situation is made worse with one thing – there has not been any kind of future development strategy aimed at exploring international markets as of yet.

How is the industry affected by Latvia’s policy? What changes to legislation would you like to see? What helps? What makes things more complicated?

Politics influence businesses. This can be explained with the geopolitical situation in neighbouring countries, legislation and tax policies employed in Latvia and Europe. Unfortunately, we have short-term planning methods when it comes to matters like those – it is important for us to complete specific budget goals, not think about the future. The state changes its tax policy views every year. This makes it difficult for companies to plan their development and investments.

How would you describe the industry’s position in the Baltics? What about competition with Estonia and Lithuania?

As I’ve already mentioned, Latvia has the most fractured dairy industry. We are considerably behind Estonia and Lithuania. I would even say the dairy industry is a mirror of our nation’s weakness – we can clearly observe that every person wants to rule their own garden; we cannot cooperate with one another, talk to one another and plan ahead.

I would also like to emphasize that the Baltic market is considered as a whole – Lithuania has powerful milk processing companies that have been cooperating with Latvia for a long time. Development strategy employed by Lithuania’s dairy industry has yielded results because Lithuania has always wanted to be the leader in this industry in Baltic States. Around 50% of milk produced in Latvia is exported to Lithuania every day. With that, competition on the market is impressive.

Estonia is several steps ahead of us, I believe. Being close to Finland, where there are many powerful cooperatives and Valio (one of the most powerful milk processing company in the world), which is owned by dairy cooperatives, has definitely benefited Estonia. So it seems strategic thinking and practical work can give results for Latvia’s dairy industry as well.

What can you can your ‘trump card’? What is your ‘Achilles’ heel’?

Our industry’s trump card is definitely high quality milk provided by local milk producers. Our Achilles’ heel is the fractured state of milk producers. There are 39 milk processing companies in the country. They are small and relatively weak when it comes to competition on global markets.

Can you say there is a lack of skilled workers in Latvia?

Considering our country’s location – Jelgava – we don’t feel any lack of qualified workers. We have established great cooperation with Latvian Agriculture University. We’ve had 14 students from the university undergo training at our company this year. We would be happy if we could establish the same kind of cooperation in the field of engineering. It should be noted, however, that we have young and competitive specialists who graduated from Riga Technical University as well. We are interested in teaching young specialists all the details of production in order to achieve better results in cheese production and put Latvijas Piens on the global map of cheese producers.

What do you predict for the next five years? Will the situation in the industry improve, worsen or remain the same?

It has become clear that without enormous dedication and hope, it would be impossible to survive in this industry. With that, I’m certain that five years from now our industry will be in a much better situation. Everyone understands that we need to change in order to be certain about the future and secure better competitiveness. Dairy producers have to cooperate more than do now. We need to cooperate with one another based on common plans for the future.


Leave a reply

Think tank forum to assess the state and development of 16+1 format

Latvia’s Foreign Policy Institute will organize a forum for international think tanks for countries taking part in the 16+1 format in the Foreign Ministry in Riga on 4 November.

EP: 2017 budget should allocate more money to jobs and youth

The European Parliament has carried out a plenary vote to request more money to help young people find jobs, enhance economic growth and help third countries deal with the migration crisis. According to MEPs, the opinion of the EU Council in regards to budget cuts should be changed in the opposite direction.

EP approves million-euro assistance to Estonian laid-off industry workers

The European Parliament has backed the allocation of 1.1 million euros to assist people in north-eastern Estonia, who lost their jobs in mass lay-offs in shale oil production and chemical industry.

NATO confirms entry of two Russian warships into Baltic Sea waters

On Wednesday, 26 October, NATO confirmed the entry of two Russian warships into the waters of the Baltic Sea.

Italy hit by earthquakes again

A pair of powerful earthquakes have shaken central Italy on October 26, causing damage to buildings.

Changes to Handling of Alcoholic Beverages Law and other matters viewed by Saeima

On Thursday, 27 October, the Saeima will gather for a meeting to decide on the new legal draft On Public Procurements. New regulations for procurements provide a number of changes and additions to the current regulations.

Study: Wildlife populations have globally decreased by 58% since 1970s

The numbers of wildlife in the world have since 1970 decreased by 58%, it has been found in a study.

Fine applied to two Knauf Group plasterboard suppliers

On 30 September, Latvia’s Competition Council made the decision to punish Knauf and Knauf Group’s Norgips sp.z.o.o. from Poland for using a loyalty system that considerably restricted competition, thereby breaching the prohibition on abuse of market dominance.

Pharmacies in Sweden restrict sale of paracetamol

Restrictions should be put in place in the sale of paracetamol setting forth a ban to sell more than one pack of the drug to minors, decided Swedish pharmacies on October 26.

Ambassador: we are beneficial to the Chinese, but we can be even better

On 5 November, Latvia will not only be the host for the 16+1 format, but also the destination for the first official visit by the Chinese prime minister, said Latvia’s ambassador in China Maris Selga.

UK pledges to send drones and tanks to Estonia

British defence minister has this week outlined the country’s plans of its involvement in NATO’s push to increase the defence capabilities of Estonia.

Not all Roma happy about Lithuanian firm making tours to largest Roma village in Baltics

Lithuanian Roma representatives have been critical about a tour agency organising sightseeing tours to the village of Kirtimai promoted as «an extreme challenge» having a former drug addict as a guide.

Fifteen Syrian refuges arrive in Latvia from Greece

On Tuesday, 25 October, fifteen people, including nine children, arrived in Latvia from Greece as part of the European Union resettlement programme.

African swine fever reaches Dundaga

Latvian Food and Veterinary Service has received laboratory test results that confirm the presence of African swine fever in two dead wild boards found in Dundaga.

Latvia receives historically highest score in latest Doing Business rating

In the latest Doing Business 2017 study of the World Bank, Latvia is put on the 14th spot among 190 participating countries. This is historically the highest accomplishment for Latvia and an improvement over last year’s result. In terms of business-friendly environment, Latvia is on the 6th place among EU member states.

Raimonds Graube steps down as commander of Latvian Armed Forces

Raimonds Graube, commander of Latvia’s National Armed Forces. He said he decided to do so in order to «allow the military chain of command to develop».

Vatican prohibits keeping cremation ashes at home

Leadership of the Roman Catholic Church in Vatican has this week announced in its cremation guidelines that the ashes of cremated Catholics may not be scattered or stored at home.

Arrests in Serbia target people involved in spying on PM of Montenegro

The Serbian government has stated on October 24 that a group of persons involved in spying on the Montenegrin head of government have been arrested. «There is irrefutable evidence that some people, and that's not those who were arrested, monitored the movement of the Montenegrin prime minister on a daily basis, every second, telling other people who were supposed to act on it,» Serbian Prime Minister Aleksandar Vučić stated.

BATL: industry doubts economic justification of electrifying Latvia’s railway network

The project for the electrification of Latvia’s railway network is currently under review by Finance Ministry, Edgars Putra – the ministry’s parliamentary secretary – told Krustpunktā programme of Latvijas Radio on Tuesday, 25 October.

In pictures: France evicts migrants from notorious Jungle tent village

In northern France, near Calais, authorities have commenced transporting migrants away from Jungle, the tent village, where several thousand migrants have been living for years.

Payments of benefits to be stopped for refugees who left Latvia

On Tuesday, 25 October, the Cabinet of Ministers supported the legal draft detailing amendments to the Asylum Law, which were developed to enhance Latvia’s asylum provision system.

Government urged to declassify Citadele Bank’s sale

Saeima’s Public Expenditure and Audit Committee has sent a letter to the Cabinet of Ministers, requesting the latter to lift restricted access status on all information related to the sale of Citadele Bank.

Number of black stork chicks declined significantly this year

The small amount of precipitation has negatively impacted the feeding and nesting of black storks in Latvia, as concluded by the Nature Conservation Agency, which had performed annual monitoring of endangered black storks in cooperation with Latvian State Forests this year.

Estonia not willing to ban fur animal keeping and skinning

Reacting to a call from animal rights activists, Estonian environment and rural affairs ministries have found that there is no reason to prohibit fur farming in the country.

IMF on Estonia: Increase in wages could harm exporter competitiveness

Estonia should take care of rising imbalance of wake increase and lagging productivity to ensure Estonian exporters can be profitable in foreign markets, the International Monetary Fund evaluated.

Newest comments