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Belarus Food and Drink Report Q1 2010
Business Monitor International, Dec 2000, Pages: 947
Belarus Food and Drink Report provides industry professionals and strategists, corporate analysts, food and drink associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Belarus' food and drink industry.
With the agriculture and food and drink industries playing an important role in the country’s economic development, the government of Belarus has been focusing on increasing exports from these sectors, as discussed in BMI’s recently published Belarus Food & Drink Report for Q110. However, recognizing that increasing exports, particularly to the competitive and stringent EU market, is a long-term and challenging goal, the government is also looking to attract greater investments in the local food production industry, as can be seen with a number of recent developments.
Owing to its proximity to the major Russian markets of Moscow and St Petersburg, many Belarusian food and drink companies have historically targeted Russia for exports, but have now started to look further afield for export opportunities. While Russia is the region’s biggest market, it is growing increasingly competitive, with consumers demanding higher quality products. However, another major issue is Belarus’ relationships with Russia, which has been marred by rising tensions in past months. Relations have soured due to a number of political issues and many believe that this is the cause behind the Russian decision to ban a number of Belarusian food products, citing health and safety concerns. The trade ban, which started in June, has had a major negative impact on the country’s dairy sector, with more than half of its total dairy production historically going to Russia. Under such circumstances, diversifying export markets has become all the more urgent.
In October it was announced that Belarus is planning to increase sugar exports to the EU, targeting those countries that already import its sugar, such as Lithuania, Latvia and Poland. This was followed by an announcement in November from the Ministry of Agriculture and Food saying that it expects to start supplying meat and dairy products to the EU within the next six months. The country is currently engaged in a series of talks with the EU regarding food supplies, with a number of major producers working on technology upgrades in order to meet EU standards.
However, several major obstacles remain in terms of increasing exports. One particular issue is the continued nuclear contamination from the 1986 Chernobyl disaster. In fact, a June report from Reuters said that the EU plans to extend the legislation on radioactivity checks by 10 years on foods imports from impacted areas, as the current legislation is due to run out on March 31 2010. The products affected by the restrictions are wide-ranging and include meat, poultry, eggs, dairy products, honey and wild fruits. Therefore, the government is wisely not focusing all efforts on the EU market, but is also looking further afield. In November it was reported that the governments of Belarus and Kazakhstan are planning to create a joint venture (JV) to manufacture dairy products. While Belarus benefits from a stronger agricultural sector and can contribute its know-how to the JV, Kazakhstan can bring its greater financial strength to the table, a vital contribution in this time of tightened global credit.
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