Smaller firms and subcontractors are expecting to be particularly hard hit by Thursday’s announcement that Russia is placing an embargo on all food imports from the west in retaliation for European Union and U.S. restrictions over Ukraine.
Finnish trucks carrying dairy exports to Russia have been halted at the border, as a result of sanctions announced by Russian Prime Minister Dmitry Medvedev. The Kremlin on Thursday unveiled a full and immediate ban on food imports from the EU, U.S. and other western countries, including Canada, Norway and Australia.
The embargo covers fruit, vegetables, meat and dairy products, and it will remain in place for at least a year, Medvedev said.
Food exports to Russia currently make up 0.5 percent of all Finnish exports. The supermarket conglomerate S-Group, who operate 17 stores and three hotels in St. Petersburg, said it expected the sanctions to cause them significant losses, with imported goods making up between a quarter and a third of all items stocked in their outlets. The group said they have no current estimate of the true extent of the impact,however.
Other companies, such as Finland’s largest dairy producer, Valio, said they will be “hit hard” by the sanctions. The group said they expect their exports to Russia to fall in value from $574 million last year to around $133 million, but promised their suppliers that they will continue being able to buy products from them.
Supply chain hit
However the measures are likely to cause a chain reaction for related industries such as logistics, with smaller providers feeling the effects more accutely. Already on Thursday afternoon lorry drivers in Lappeenranta on the border began reporting that Russian border staff were no longer allowing trucks carrying dairy products to enter the country.
One family-owned transport firm, Team Niinivirta in Kotka, said that their fleet of 12 vehicles and 18 drivers was now rendered redundant by the ban. “Valio has been our largest customer,” said the firm’s owner, Eero Niinivirta. “When I heard about the counter sanctions, I didn’t know whether to laugh or cry.”
Responding to the sanctions, President Niinistö expressed “great concern” at the deteriorating relations between the west and Russia. “We are clearly knocking at the doors of the Cold War,” he said.
Russia also announced a ban on Ukrainian airlines using Russian airspace for transit flights, and says it is considering whether to extend the restrictions to also cover European and U.S. air carriers. Such a move would vastly increase costs and flying times for routes between Europe and Asia.
Nuclear plant faces Russia-related obstacle, says politician
Earlier this week, Member of Parliament Heidi Hautala said this week that the nuclear plant enterprise at Pyhäjoki, Northern Ostrobothnia, will face difficulties because of the facility’s nuclear fuel and waste management is to be serviced in Russia.
Hautala said that cooperation between Finnish and Russian authorities in the maintenance of the proposed Pyhäjoki nuclear power plant is likely to be difficult due to this year’s events in Crimea and in Eastern Ukraine. She also said that Rosatom, the power company under Kremlin control which would be a part owner of the plant, is more than an average state-owned company.
”To the best of my knowledge, Rosatom would be in charge of the Pyhäjoki site’s nuclear waste disposal from start to finish,” Hautala wrote in an Yle Lapland column. “This would mean that the used fuel rods would be returned to Russia for servicing. In this type of reprocessing, plutonium that can be used in atomic warheads is separated from the fuel.”
”Are we in Finland really prepared to help along the nuclear weapons capacity of a country than is expressing hostility towards its neighboring countries?” she asked.
Hautala said the nuclear power plant scheme cannot go forward “as if nothing had happened,” referring to Russia’s part in the ongoing crisis in Ukraine
This story is posted on Alaska Dispatch News as part of Eye on the Arctic, a collaborative partnership between public and private circumpolar media organizations.