Swiss seek bigger slice of Russian cheese market

At Intercheese's headquarters in Switzerland, the phone barely stops ringing these days. A Russian voice is usually at the other end. Since August 7th, when Vladimir Putin's government banned many food imports from nations supporting sanctions due to the country's role in the Ukraine crisis, at least 14 Russian importers have contacted Intercheese. The reason for the surge in business: Switzerland hasn't joined the European Union, the US, Canada, Australia and Norway in penalising Russia.

“Russian importers are looking for the cheeses they can’t get from the Europeans anymore – Mozzarella, Gouda and Edam,” said Daniel Daetwyler, managing director at Intercheese. The Beromuenster-based company sold as much as 20 tons of cheese to Russia in 2013 and will increase sales to the country of the varieties most affected by the EU embargo, even though it won’t be able to meet demand, Mr Daetwyler said.

Neutral edge

Cheese is Switzerland’s most important agricultural export and the country’s neutrality is providing local producers with an edge in selling Gruyere and Emmental to 142.5 million Russians. Swiss producers shipped 431 metric tons of cheese to Russia last year, according to the Swiss Customs Administration.

“If the embargo remains, it’s possible we’ll export more cheese to Russia,” Jacques Bourgeois, director of the Swiss Farmer’s Union. “But Switzerland is a small country, we can’t just double production from one day to another. If there’s more demand, of course we’ll have to see that we can deliver.”

Russia imported $25 billion (€18.7 billion) of products on the banned list last year, $9.5 billion of which came from nations now blacklisted, according to Capital Economics Ltd estimates. Border guards in Russia and Belarus turned back trucks loaded with cheese, yoghurt and meat, officials from Lithuania and Estonia said last week. The euro area exported more than 292,000 tons of dairy products to Russia last year, with the Netherlands providing almost a quarter, followed by Germany and France, according to Eurostat.

The Republic’s agricultural exports to Russia in 2013 were worth €235 million.

For Andrey Danilenko, head of the National Milk Producers’ Union in Moscow, Swiss cheese producers could become a stand-in for those in the EU.

“Imports of Swiss cheese to Russia may rise manifold,” Mr Danilenko said. “Switzerland may replace exclusive cheeses earlier shipped from other EU countries. Previously, a lot of cheese was imported from the Baltic states and Poland, which it couldn’t compete with due to higher logistics costs.”

Mr Danilenko expects production in Russia and its ally Belarus to replace most of the volume that will drop out over the ban. Even so, Swiss and Serbian cheese may partially replace the dropout. – (Bloomberg)