EU’s sanctions directly target Russian dairy industry

The Russian Union of dairy producers, Soyuzmoloko, said that European companies will now halt the export of centrifugal cream separators – equipment used to separate milk into skimmed milk and cream.

Several other goods, not exclusive to the dairy industry but widely used at the milk processing plants, are also under the restrictions, including heat exchangers, vacuum pumps, several types of transformers and other electrical equipment.

Dairy equipment imports from other countries

The new restrictions are unlikely to dramatically deprive the Russian dairy business of western technologies, Roman Chuybak, Soyuzmoloko manager for interaction with authorities, told local news outlet, Dairy News.

“The [Russian] business has already been under restriction for a year, and most of the newly-sanctioned goods of European origin were already extremely difficult or impossible to import to Russia,” Chuybak said.

In light of these restrictions, Russian dairy companies have switched to alternative suppliers. For example, milk separators are purchased from Turkey, while other equipment is sourced from China and India, Chuybak said, adding that Russian companies managed to replace a considerable share of European imports.

On the other hand, the impact of western sanctions on the Russian dairy industry should not be underestimated, Chuybak said, warning that not all equipment can be found on alternative markets. As the list of sanctioned goods is expected to increase further, he predicted, the problems “will gradually worsen”.

The Russian dairy industry could be further impacted by western sanctions – since 1 March, Turkish customs officials suddenly stopped permitting the transit of sanctioned goods bound for Russia through Turkish territory. This has allowed Turkish companies to re-export European goods to Russian customers. In Russia, several companies have admitted importing some equipment through third countries, including Turkey, the UAE and Kazakhstan, under a scheme known as a parallel import.