Russia ban hits trade as Arla slashes milk price

By Rod Addy contact

- Last updated on GMT

Arla said it would have to cut 79 jobs in Denmark as a result of the Russian ban on EU food imports
Arla said it would have to cut 79 jobs in Denmark as a result of the Russian ban on EU food imports

Related tags: International trade, Arla foods

Arla Foods has slashed its standard milk price by  €1.5 cents/kg, (1.2p a litre in the UK) from September 1, blaming market conditions and the impact of Russia’s ban on EU food and drink.

Commenting on the reduction, Ash Amirahmadi, Arla UK’s head of milk and member services said: “Global commodity markets have fallen sharply over recent months – a development that has affected dairy companies, including Arla.

“In addition, Russia has announced a ban on agricultural import from certain states, including the EU. The ban has affected Arla Foods’s exports and we are now unable to export products to Russia.

“This further reduction in Arla’s global milk price is necessary due to a continued downward movement in global and European prices, made worse by the Russian import ban.”

Cut 79 jobs

Earlier this month, Arla revealed it would have to cut 79 jobs in Denmark as it restructured production in the wake of Russia’s trade embargo.

Some UK food manufacturers have played down the impact of the ban, although the pelagic fishing industry in Scotland claims it will be particularly badly hit​.

A total of £17M of frozen fish and seafood are exported to Russia from Scotland. Total UK food and drink exports to Russia are estimated to be worth £115M.

Sanctions

Russia’s one-year imports ban – a retaliation for sanctions prompted by the Ukraine crisis – covers cheese, fish, beef, pork, fruit, vegetables and dairy products. Scottish whisky exports are unaffected.

National Farmers Union (NFU) deputy director general Martin Haworth said, while the biggest impact was likely to be felt in the rest of Europe, rather than the UK, it could have a knock-on effect.

“This timing from president Putin is also worrying as it comes when most farm prices in the UK have already seen significant falls in the past year and any further downward pressure can only exacerbate problems,”​ said Haworth, shortly after the ban was first announced.

Related topics: Dairy

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