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5 Aug, 2013 13:33

Belarus and Russia in a ‘chocolate war’ against Ukraine

Belarus and Russia in a ‘chocolate war’ against Ukraine

Minsk has decided to support its customs union ally Moscow and ban the transit of confectionary by the Ukrainian firm Roshen to Russia. The so-called ‘chocolate war’ with Russia could cost Roshen an estimated $200mn.

Belarus will not allow confectionery manufactured by Roshen to cross its territory, the Belarusian Ministry of Health said in a statement on Friday. That’s after the Russian sanitary services banned the confectioners products after the toxic hydrocarbon benzopyrene was found in Roshen milk chocolate.

While Roshen products are still being tested by the country’s sanitary controls department, “the Belarusian Ministry of Health has taken measures to prevent export of Roshen confectionery to Russia via border checkpoints at the Belarusian section of the Customs Union customs border,”  the document says.

“In case the Ukrainian-made confectionery is found to violate safety requirements, exhaustive measures will be taken in line with the current laws of Belarus and the Customs Union,” the ministry stressed.

Roshen could stand to lose $200mn from the ‘chocolate war’ with Russia according to Oleksandr Sokolov, director of analytics at Pro-Consulting talking to Ukrinform.

“Based on the company's turnover figures of the previous year at $1.2bn, as well as data on the quantity of products supplied to the Russian market, we can talk about possible losses of one sixth of the annual turnover of the corporation, provided there is a long ban,” Sokolov said.

Kazakhstan, the third party to the Customs Union with Russia and Belarus, has so far not found any signs of benzopyrene in Roshen products, according to Zhandarbek Bekshin, the chairman of the Committee for State Sanitary and Epidemiological Supervision at the Health Ministry. The committe has investigated 7 Roshen products, with tests still being conducted in Astana and Almaty. At the moment Roshen has about 20% of the country’s confectionary market, Bekshin added.

On Saturday Tajikistan said it had found no impurity in Roshen confectionary products imported into the country.

At the weekend tests were ongoing in Kazakhstan, Belarus and Moldavia.

Roshen operates confectionery factories in Kyiv, Vinnytsia, Mariupol and Kremenchuk, the Bershadmoloko dairy producer, a stud farm in Ukraine and also confectionary facilities in Klaipeda, Lithuania and Lipetsk, Russia.

image from http://roshen.com

A dose of bitter politics in a confectionary conflict?

Russia has long been in trade wars with Ukraine, where gas issues dominated the scene.

The recent ban on Roshen imports by Russia marks another and traditional stage of the economic relations becoming sharper, according to Valery Gladky, director of the analytical Bureau for Economic and Social Technologies, talking to Ukrainian radio.

“Traditionally such a sharpening happens after certain movements at a political level – after Russia’s President Vladimir Putin visit to Ukraine to celebrate the 1025th anniversary of Christianization of Kievan Rus’,” Gladky said.

“From this point of view sharpening of the economic relations is considered to be a reply by Russia to the failure to reach certain progress in political relations between the two countries. That’ the method to press, to stimulate the Ukranian political authorities to consider the country’s entrance into the Customs Union,” Valery Gladky concluded.

Russia does seek to have Ukraine within its Customs Union, as “without Ukraine Russia’s Renaissance as an economic powerhouse is very complicated,” Eduard Popov, Director of the Black Sea - Caspian Region Centre for Information and Analysis of the Russian Institute of Startegic Studies (RISS), told Mignews.com.

However, Onishenko denied any allegation that the ban imposed by his agency was politically motivated.

“Previously, cheese was a sensitive issue. It is not forgotten. Now there is a new issue. They won't find any political component, no matter how much they yell and look. We are talking about quality, which is below the stated standards,” Onishchenko said.

Official talks between Russia and Ukraine are scheduled to kick start on Monday, according to Ukrainian Minister of Agrarian Policy and Food Nikolai Prisyazhnyuk.