Bloomberg News

Russia Halts Lithuania Dairy Imports, Boosting Trade Tensions

October 07, 2013

Russia banned dairy-product imports from Lithuania due to what it said were safety concerns, adding to a month of trade disruptions that the Baltic nation says are politically motivated.

The European Union last month urged Russia to stop targeting Lithuania, which currently holds the rotating EU presidency, with “punitive” trade restrictions. Lithuania’s leaders, including Prime Minister Algirdas Butkevicius, say the curbs probably are Russia’s way of protesting plans to strengthen EU trade ties with Ukraine and other ex-Soviet countries at a November summit in the Lithuanian capital.

The “restrictive measures” are necessary because of “weakening” food quality and safety control by Lithuanian dairy producers and regulators, the Federal Consumer Rights Protection Service, the state consumer-welfare body in Moscow, said today on its website. Russia’s customs service will impose the suspension, it said.

The Lithuanian cabinet will meet today to determine the best response to Russia’s latest actions, Foreign Ministry spokeswoman Rasa Jakilaitiene said by e-mail.

Lithuania, after becoming the first Soviet Republic to declare independence in 1990, suffered more than a year of trade blockades as Moscow tried to convince it not to leave the Soviet Union.

Shares Fall

Lithuanian companies exported 557 million litai ($219 million) of cheese and other diary products to Russia in 2012, according to the country’s statistics office. That was more than a fifth of the value of all Lithuania-origin goods exported to Russia last year, according to data on the office’s website.

Shares of AB Rokiskio Suris and AB Pieno Zvaigzdes, Lithuania’s two biggest dairy companies, were down 2.5 percent and 1.5 percent, respectively, in Vilnius at 10:22 a.m. AB Zemaitijos Pienas fell 1.9 percent and AB Vilkyskiu Pienine traded down 1.3 percent on the Nasdaq OMX Vilnius exchange.

Rokiskio Suris won’t comment on Russia’s import suspension until it gets “more concrete information,” Dalius Trumpa, the company’s director, said today by e-mail.

To contact the reporter on this story: Bryan Bradley in Vilnius at bbradley13@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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