Russian food import ban worries Czech producers and farmers
Many Czech food producers have invested into the Russian market in past years, and their strategy seemed to be working. But the arrival of reciprocal sanctions between the West and Russia due to the ongoing crisis in Ukraine is likely to thwart their thriving business. Voices of concern have already been heard from some of the major Czech producers active on the Russian market – but Czech farmers and small producers could face an even greater risk.
“For the last four to five years we have been trying to get into the Russian market in as large a volume as possible. Now that we’ve managed to do this and indexes indicate immense growth - from 200 million to what could have been 300 million next year - it all has to go sour,” Teplý said.
Madeta is not the only company hit by the ban. Hamé a.s., a leading Czech manufacturer of durable and chilled foodstuffs, whose pâtés are particularly popular among Russian consumers, stated that sales on the Russian market which make up for about 20 percent of the company’s annual turnover are expected to fall by up to 100 million crowns. The company’s CEO, Martin Štrupl told news website idnes.cz that the company would seek compensation for its losses from either the Czech government or the European Union. However, Hamé is a large company whose profits amounted to 5.7 billion crowns last year.
The sanctions could however have a more serious impact on Czech farmers and smaller producers. They fear that the expected large surplus of foodstuffs in Europe will end up being sold at knockdown prices. If that is the case, the governments of agricultural giants such as France, Germany or Poland, could step in to support their own producers making it more attractive for food retailers to buy products at lower prices from them, rather than from local suppliers.
Czech Prime Minister Bohuslav Sobotka suggested on Thursday that if the problem were to become serious, it should be approached on a Europe-wide basis, for example through the European Union’s common agricultural policy. Meanwhile, the Czech Ministry of Agriculture announced it was prepared to help Czech farmers and producers but refused to specify any particular measures before the problem was discussed within the EU.