Last week the head of the Russian Federal Veterinary and Vegetation Service, Sergei Dankvert, confirmed to the press that an EU delegation was visiting Moscow. He said the aim of the visit was to show the EU authorities just how much the Russian food sector had progressed in recent years and how well prepared it was to start exporting dairy and meat products to EU countries.
The delegates were touring food processing facilities in Moscow, Barnaul and Lipetsk, as well as meeting up with various heads representing both sectors. Existing trade with the EU is still very limited, but the volume of exported foods from Russia is expected to rise after EU expansion as Russia already has established markets in a number of the 10 accession states.
To find out more about how Russian meat and dairy processors are gearing up to EU exportation, CeeFoodIndustry.com spoke to Alexander Lachovich, deputy for food markets at the Russian Federal Ministry of Agriculture.
In response to asking exactly what it is the EU delegation have been looking for in the course of their visit, Lachovich replied: "For all food and beverage manufacturers wishing to export their products into the EU it is necessary to have certificates of quality that meet the requirements and norms for foodstuffs, as specified by the authorities. This in particular is the case for meat and dairy produce.
"Meeting these requirements is the biggest challenge in our efforts to reach EU export markets for food products. Currently not all finished foods produced in the Russian market correspond to the technical parameters registered in 'the European norms and rules' guidelines - although quality standards are exceptionally high. This gives rise to the issue of quality and competitiveness of Russian meat and dairy products.
"The second issue, which is just as important, is the required stimulus needed to increase manufacturing volumes. Certainly if demands for export are significant, the prospects of production volumes responding to the demands are very high as the means to meet such requirements definitely exist."
Lachovich also pointed out that certain dairy and meat products would probably prove to be more favourable to export to the EU markets than others. With regards to the meat sector, he indicated that sausage meat, smoked meats and delicatessen products would probably be the most viable. With regards to the dairy sector, he said that Russian specialities such as 'vareneki' - similar to ravioli but filled with cottage cheese - might be a good choice for exportations.
"I think that the European market currently has a sufficient enough supply of products such as yoghurt," he said.
In both the Russian meat and dairy sectors, production capacity is said to be nowhere near capacity, and in many cases production facilities are seriously under utilised. In view of this, increasing exports to the wealthier EU countries - where after accession there will be an estimated 456.6 million consumers - might be a good way of increasing capacity and in turn enhancing both production costs and efficiencies.
"Often many production facilities in the meat and dairy sectors are working at no more than 40 per cent of their capacity, so there is an opportunity to increase output and push exports. This is especially true for dairy products, as there is huge potential to develop the raw milk sector in Russia. However, the development of meat products might prove more difficult, due to the fact that raw meat supplies are mainly purchased from abroad."
Certainly the potential for these two sectors to tap into the EU market is enormous, as Lachovich points out.
"With the quality of Russian dairy and meat products continuing to rise, luxury, delicatessen or traditional Russian products are likely to have huge market potential. Added to the fact that there remains a huge imbalance between the importation of food products into Russia and the exportation of its food products abroad, the necessity to counterbalance this situation would also point to greater opportunities for Russian dairy and meat processors."
The interview for this article was bought about through the kind co-operation of Moscow-based market analysis company Market Advice.