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23 Apr, 2008 14:35

Will meat become a luxury for Russians?

Russian meat producers have reacted with shock to suggestions that import quotas may be tightened even further. The government aims to protect domestic livestock producers, but the industry says the plan is almost certain to backfire.

Uncertainty over import policy has caused the wholesale price of pork and beef to soar by up to 23 % in just three weeks.

Last week Russia’s Prime Minister Viktor Zubkov called on the government to work out measures to reduce meat imports.

The government already has import quotas to protect domestic livestock producers from competition. But the National Meat Association says cutting imports could actually destroy the Russian industry.

“Prices would rocket immediately, meat processing plants would shut. Meat would become hard to afford for many Russians. And we would have only Polish or French salami in our shops,” Sergey Yushin from National Meat Association said.

Russia imports up to 40% of its meat, but market players say imported meat keeps processing plants busy and is not the reason for the underperformance of local producers. That, they say, is because half of Russia’s pork is produced by small holdings.

Producers say Russia needs bigger enterprises like the pork processing plant Danish Crown with $US 8 billion of annual turnover.

What would help, according to meat producers, is state subsidies to select, breed and feed competitive pigs and cows.

“The state should support the industry, but not with prohibitive measures. I’m very pessimistic – this is the kind of policy which killed the domestic car industry,” Boris Gutnik from Meat Research Institute said.