Latviski English По-русски
Monday 21.05.2018 | Name days: Ingmārs, Ernestīne, Akvelīna

Lithuanian dairy producers seek Government help amid Russian embargo

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU

Linas Jegelevičius for the BNN

If you happened to be at a dairy products section in a Lithuanian supermarket, vivid, colorful and Russian language-emblazoned labels of yogurts, cheese, cottage cheese or sour cream will likely catch your eyes, even if you speak neither Russian, nor Lithuanian.

Dairy producers among most hit

With the Russian anti-EU sanctions put in place as retaliation to the EU and US economic sanctions in the wake of a possibly Russia-involving Malaysian jetliner downing kicking in, Lithuanian dairy producers were among the first ones to deal with the immediate outcome of the embargo.

«Indeed, we’ve been stocking our store shelves with dairy products that would usually go for export to Russia. «Pieno žvaigždžių» (a dairy producer) cottage cheese was the first Russian export-designated product to be stocked on Maxima stores’ shelves,» said Milda Januškevičienė, а Communications manager of Maxima, a giant grocery retailer.

Within days, the other «Pieno žvaigždžių»production made for Russia is expected to fill Maxima shelves, she said.

«First of all, it will be dairy goods with a sensitive expiration date: yogurt, yogurt drinks, cottage cheese and sour cream,» the retailer representative noted.

By the end of the week, other Lithuanian dairy producers’ Russia-catered dairy products also should be drawing attention with the vivid labels in most grocery stores.

«The Russian-labeled provision is 20-25 percent discounted, and the labels are easily discernible among other products. As we’ve sold dairy products meant for Russian market in the past, we’re pretty sure they won’t stay on the shelves too long: the customers are eagerly buying the yogurts, cheese, cottage cheese and sour cream. A couple years ago, there were similar circumstances,» the manager remembered.

Possible layoffs and salary cuts

Other major Lithuanian food retailers Norfa, Rimi and Iki, last Wednesday, were also looking forward to hauling the dairy exporters’ dairy tidbits to their supermarkets.

«Some of them will still bear Russian labels, and some will be relabeled. All of them will be heavily discounted, some- up to 30 percent,» insisted Darius Ryliškis, Norfa spokesman.

Meanwhile, Lithuanian dairy processors have already started ringing alarm bells, warning that Russian embargo in its magnitude will trigger an avalanche of layoffs and salary cuts.

«Their scope will depend on the EU and Lithuania decisions on support to the sector. If we will have to deduct from the production the part of Russian export, then, definitely, certain layoffs and a general decrease in the workers’ wages will be inevitable.

As if the patient who has just had infarct, we are doing whatever we can get short-term support, which would be tantamount to an injection for the patient to have the heart pumping again and recover in the course,» Dalius Trumpa, a board member of «Rokiškio sūris», a major dairy foods manufacturer, spoke illustratively of the plight.

According to Trumpa, much more important than receiving a hefty compensation for the imminent losses is guaranteeing that the dairy products surplus is bought up.

«It is a question of death and life that the daily milk surplus at around 1 400 tons now is bought up. This is how much milk we needed daily to produce dairy goods for Russian export. Unfortunately, our company itself cannot assume the risk of handling the surplus on its own.

We cannot be certain whether we will be able to sell it, and for how much and et cetera. We simply don’t have enough currents assets to do those kinds of things. Taking the risks could threaten putting us in a situation where bankruptcy or company’s closure may loom,» the businessman told Lithuanian media.

Lithuanian PM: bank loan may serve as lifeline

Having met with Lithuanian businessmen, most of whom where representative of agricultural and dairy enterprises, Lithuanian Prime Minister Algirdas Butkevičius hinted that the Government mulls suggesting Russian embargo-ill affected business bodies ask for bank loans as a lifeline in refilling their shallower coffers. If that were the case, the state would obligate to compensate the interest rates up to 95 percent.

«Banks, obviously, need some assurances and details as far as the production and sales market are concerned, but I reckon that with the state guarantees-assured, they might be willing to grant such loans,» the Government head said.

But the Rokiškio sūris stakeholder insisted that interventional surplus milk purchases would be in the best interests of the dairy producer.

«The milk production, like cheese, skim milk powder and butter, with the time-insensitive expiration date, could be stored and sold when a better time comes,» Trumpa argued.

Reportedly, the Government is not willing to come at rescue of the embattled producers that way.

Ministries scramble to find countermeasures

Meanwhile, AB «Pieno žvaigždės», another Lithuanian dairy producer, says that it is not likely to need a lifeline to withstand Russian embargo, but cozies up with an idea of shrunken profits.

«AB Pieno žvaigždės sales to the Russian Federation comprised 30-35 percent of all sales. Part of them will be redirected to other, less profitable markets, but it will be impossible to offset the relocation of sales until the end of the year.

Venture expects to post around 800 million litas (around 230 million EUR) in sales in 2014. Loss of Russian market does not pose threat to the continuity of our entrepreneurial activity, but it will have a negative impact on its profitability,»«Pieno žvaigždės» statement read.

Reacting to the Russian sanctions, the Lithuanian Ministry of Agriculture (LMA) announced it will address EU institutions, asking them for immediate dairy and meat market regulation measures.

To buffer the embargo ill-effects, the ministry has proposed the Finance Ministry to look over the current taxation and come up with some tax exemptions.

Giving the green light to the so-called ritual slaughtering would open for Lithuanian breeders Israeli and Arab countries’ markets, the LMA suggested.

Some new meat and dairy markets, some of them as far as China and South Africa, also are being weighed as a countermeasure to Russian embargo.

Ref: 020/

Leave a reply

  1. mike walsh says:

    So, loss of profit and a glut of surplus heavily discounted produce. Ouch. Just what others have been predicting.

    “It’s a double détente system. Russia will halt imports, but the products that aren’t exported will land back on European markets and create a crisis situation,” Xavier Beulin, the president of FNSEA, said in a TV interview on iTele on Thursday.

    For the Baltic States this market will not return. Snubbed Russia will never trust EU producers again. Would you?

    Thumb up 0 Thumb down 0

  2. John says:

    Stop complaining, Lithuanians. Investing into Russia always poses big risks, as well as profits under lucky circumstances. So state shouldn’t come at rescue when things go bad one day.

    Thumb up 0 Thumb down 0

    • Foreigner says:

      Well, quite difficult to predict what governments will do….

      Thumb up 0 Thumb down 0

      • mike walsh says:


        Austria is warning of catastrophic falling prices, and the Netherlands is saying losses could be triple initial estimates. A third of Lithuanian milk producers say they are facing problems.

        The wholesale price of a kilogram of fruit or vegetables could halve due to excess supply, the Austrian newspaper Salzburger Nachrichten cites Rupert Gsols, a federal coordinator of the Austrian Union of Market Gardeners.

        There is a bumper crop of European apples in 2014; around 12 million tons against the normal 10-11 million tons. About 370,000 tons are harvested in Poland.

        The economic damage to the Netherlands from the Russian boycott could be triple the original estimate and reach €1.5 billion, Dutch News cites Hans de Boer, the chief of VNO-NCW Dutch employers’ organization.

        Thumb up 0 Thumb down 0

First Russian floating nuclear power plant reaches Murmansk

Russia's floating nuclear power plant, after passing through the Baltic sea, has arrived in the Arctic port of Murmansk over the weekend as it prepares for its first mission, supplying electricity to an isolated Russian town across the Bering Strait from Alaska.

Foreign clients’ deposits in Latvian banks declined 27.1% in Q1 2018

Deposits of foreign clients attracted by Latvia’s banks have declined 27.1% in Q1 2018. At the end of March, it was EUR 5.869 billion, as reported by Finance and Capital Market Commission.

National Alliance proposes MEP Roberts Zīle as its prime minister candidate

The board of the National Alliance has decided to pick member of the European Parliament Roberts Zīle as its prime minister candidate for the 13th Saeima elections, as confirmed by the party.

Riga City Council changes internal rules again; each deputy given ten-minute limit for questions

On Monday, 21 May, Riga City Council changed its rules for Q&A sessions, providing a ten-minute limit for each deputy to ask questions. This is the third time the city council has changed its internal rules.

Committee head: EU funds would help secure meaningful education for youngsters

«Seven to eight thousand youngsters leave Latvia every year. While ten years ago 13 to 25 year old youngsters formed 20% of the country’s population, their proportion dropped to 13% in 2017,» says Saeima’s European Affairs Committee chairperson Lolita Čigāne.

River Emajõgi guarded by mass protest against pulp mill

In Tartu, human chain has been formed by about 4 500 people in protest against the plan to build a billion-euro pulp factory near the River Emajõgi, the organisers of the event have stated.

Association: loan repayment indexes improve in non-bank consumption loan segment

In 2017, members of Latvian Association of Alternative Financial Services issued in loans EUR 180.5 million. Compared to 2016, this is an increase of 6.9%. Members’ credit portfolio was EUR 88.7 million at the end of 2017, which is 8.1% more than a year ago.

Estonian producer prices higher by 2.1 on year, due to energy supplies

Estonian producer price index of industrial output increased by 2.1% between April 2017 and April this year, Estonian statisticians have estimated.

Vitol: limitation of shell companies’ activities cannot possibly affect transit companies

Changes to the law that provide restrictions for shell companies cannot possibly affect transit companies. Because of that, claims voiced prior to adoption of said amendments and their possible impact on transit sector seem rather confusing, says Vitol Baltic chairman Robert Kirkup.

De Facto: Latvian minister’s business partner manufactures ships for Russian army

Latvian Agriculture Minister Jānis Dūklavs’ business partner in Piebalgas alus brewery – Russian businessman Igor Shekhelev – manufactures ships for the Russian army, as reported by De Facto programme of LTV.

Property-sharing site Airbnb agrees to share owner income with tax authority

The home-renting service Airbnb has agreed to automatically report homeowners' income to tax authorities in Denmark in a landmark agreement, which is expected to make it easier to detect tax evasion by homeowners, who are renting out rooms and houses on the website.

Latvia shipped 11.7% more oil products in Q1 2018

As part of the postponed excise tax payment regime, the volume of oil products shipped from Latvia in Q1 2018 was 13,869 or 11.7% larger than the one recorded in the same period of 2017, according to data compiled by the State Revenue Service.

What have Italian makers of government agreed on?

In Italy, the two populist parties preparing form a national government have published joint policies including tax cuts, a guaranteed basic income for the poor and deportations of 500,000 migrants.

Thunderstorms expected in Latvia this week as well

On Monday, 21 May, weather in Latvia will not change much – dry and not cloudy for the most part. On Tuesday and Wednesday, however, precipitation areas will pass through Latvia, bringing heavy rainfall, thunderstorms and strong wind, as reported by Latvia’s Environment, Geology and Meteorology Centre.

Week in Lithuania. Liberal Movement to turn to court over VSD statements

The board of Lithuania's Liberal Movement has decided to turn to court over information published by the State Security Department, allegedly damaging the party's reputation.

BNN summary of the week: distorted state administration, Liepājas metalurgs recovery, and Latvia unemployment level

BNN offers a summary of this week’s topical news in a variety of categories: Change; Growth; Business; Fight; Future; Opinion

New approach to combating drunk drivers – forced correction programme

Latvia’s Justice Ministry reports that the administrative penalties reform proposes introducing stricter punishments for drunk drivers. If a person is caught drunk driving, their license would be confiscated. On top of that, to recover the license, that person would have to pass a social correction programme.

Latvian MEP to «cause a scandal» where he can to stop school reform

Members of the European Parliament Andrejs Mamikins and Miroslavs Mitrofanovs have gathered support from 114 of their fellow MEPs to request the Latvian government and Saeima to review the already approved amendments to the Education Law and General Education Law that govern realization of the national minorities’ school reform, as confirmed by Mamikins.

Germany criticises U.S. attempts to block Nord Stream 2 gas pipeline

As to the controversial Nord Stram 2 Russian gas pipeline via Baltic sea to Germany, the German Economy has evaluated that American attempts to block it could be aimed at increasing U.S. a planned Russia-Germany gas pipeline to increase its own energy exports.

Number of complaints about taxi services at Riga International Airport on a rise

The number of complaints about taxi services at Riga International Airport continues to increase, said the airport’s board chairperson Ilona Līce in an interview to 900 seconds programme of LNT.

Ryanair sees Estonia as important market, considers local hub option

Irish low-fare airline Ryanair considers Estonia an important market, the firm's chief executive Michael O'Leary noted while visiting Tallinn earlier in the week.

Minister: UN should act to call violators of international law to justice

«The United Nation Security Council, as the main institution maintaining peace and security, has a special responsibility, because its activities affect compliance with international law,» says Latvia’s Foreign Affairs Minister Edgars Rinkēvičs.

Banks to report private persons whose account turnover exceeds EUR 15,000

From 18 May onward, banks will have to report private persons whose annual account turnover exceeds EUR 15,000, as provided by the Cabinet of Ministers’ supported order, under which the State Revenue Service is to be provided with information about a private person’s turnover and balance.

Baltic States request expanding NATO’s battalion with air and naval forces

Baltic States plan to request expanding international NATO battalion with air and naval forces, as confirmed by Lithuanian Foreign Affairs Minister Lino Linkevičiaus, who met with US President’s National Security Advisor John R. Bolton in Washington alongside his Latvian and Estonian colleagues.

Poland uncovers Russian hybrid war networks

Poland has detained a Russian national suspected of working with accomplices to stimulate social tension with neighbouring Ukraine and neutralised two Russian hybrid war networks, the Polish Internal Security agency has stated.