Putin’s support for Ukraine rebels could affect Ireland’s cheesemakers

Just as the flapping of a butterfly’s wings can affect the path of a tornado, Vladimir Putin’s chest-thumping could eventually be felt by a cheesemaker in rural Limerick.

Russia's decision yesterday to ban fruit, vegetables, meat, fish, milk and dairy imports from the European Union, the United States, Australia, Canada and Norway was a response to western sanctions imposed over Moscow's support for rebels in Ukraine.

On the face of it, the closure of the Russian market to Irish produce is not a major disaster. Exports of Irish food and drink to Russia last year were worth €232 million, which is less than 2.5 per cent of our total annual food and drink exports.

Trade in prepared foods accounted for almost half this amount at €112 million, while pigmeat exports, the second most important category, amounted to €59 million. However, Russia banned pigmeat imports from the European Union in January because of an outbreak of African swine flu.

‘Real worry’

Minister for Agriculture

Simon Coveney

singled out cheese exports for concern yesterday, saying it was a “real worry”.

Last year our dairy exports to Russia were worth almost €18 million. But it’s not only those exports we should be concerned about.

If , say, enormous cheese producers in other parts of Europe can no longer export cheese to Russia, what will they do with it? Is there a danger they will try to sell it at a discounted rate to other European and international markets? And how would that affect our cheese exports to those markets?

According to Cormac Healy of Food and Drink Industry Ireland, Russia accounts for one third of total EU cheese and butter exports. It also accounts for 15 per cent of EU beef exports and accounted for 25 per cent of EU pigmeat exports before the ban.

Trade mission

There is also a danger that we could lose our tenuous grip on the Russian market because of the ban. Irish exporters have been working hard to court Russian buyers in recent years and former president Mary McAleese led a very successful trade mission to Moscow and St Petersburg in 2010.

But if Russia now turns to countries such as Argentina to supply their food, what will happen when the ban is lifted?

Will these competitors have gained a valuable foothold in Russia and will Irish producers be able to regain their contracts?

Only time will tell.