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Greek traders violate the Russian embargo

05 October 2014 / 16:10:01  GRReporter
2921 reads

After the decision of the Russian government to impose an embargo on imports from the EU, Greek exporters are trying to sell their products in Russia via Belarus, Turkey and Kazakhstan, most times at prices below cost.

This tactic is followed mainly by fruit and vegetables growers, whose products are most at risk; if not consumed immediately, they end up in the bins. According to a source acquainted with the situation, "In order for their produce not to be thrown away, they approach vendors outside the embargo who "repaint" them and export them to Russia. Of course, there can be no word of profit, since foreign merchants, knowing the difficult situation of Greeks, want to buy at the lowest possible price".

The "complaints" of Vladimir Putin to the President of Belarus, Alexander Lukashenka, that products from different EU countries find their way to Russia via Belarus, were not accidental at their recent meeting.

Export attempts are also made via other countries, such as Syria and Egypt, but they are less known than via Belarus and Turkey. The latter, being a neighbour of Greece, makes the shipment of the products take less time and cost less money. Moreover, Greek businessmen know this area well and believe that there is less risk.

A turn to new markets

At the same time exporters are turning to other markets to sell their goods and to compensate losses from the Russian embargo. The Balkan markets, such as Albania, Macedonia and Bulgaria are the first choice because, apart from the traditional trade connections, there are also many supermarket chains with Greek participation, such as Veropoulos and Marinopoulos (who manage the Carrefour chain).

The Middle East is also of interest as there the demand for Greek food increases significantly each year. The big drawback is that in both cases the prices at which Greek exporters sell are extremely low, with up to 30% lower. So, it is a forced export, the framework of negotiation being narrow and the profit - minimal.

Specialists indicate that turning to new markets must be permanent and with a horizon of at least 10 years, in order to be effective, and underline the need to stop individual attempts without an organized plan. The EU formally authorized the expansion of activities to Ukraine, Moldova and Georgia, with which it signed trade agreements recently.

The President of the Union of Greek Exporters, Christina Sakelaridi, said for Imerisia newspaper that the new markets cannot replace in any case the size and longstanding links which it had with Russia. She says that there should be full compensation for the affected persons on the part of the EU, including increasing defence instruments for exporters.

The biggest "victims" are fruits, vegetables and fish

Although the data on the consequences of the embargo imposed in early August are not yet complete, it is believed that in addition to raw and preserved fruits and vegetables, and especially peaches (exports to Russia amounted to € 130 million), exports of fish (€ 9.8 million per year) will also be affected. Another 10 million from losses of transport companies must be added, as well as long-term consequences in the event that the embargo is maintained.

Export - in decline

Day after day the effects of the embargo are becoming more visible. But, as Mrs. Sakelaridi says, even from the beginning of the year, exports to Russia were difficult because of the obstacles created by the Russian side to European products – because of bureaucracy and the stopping of trucks.

During the first half of 2014, before the imposition of the embargo, total Greek exports to Russia, according to the Union of Greek Exporters declined by € 30 million or by 16%. For the first time in recent years Russia dropped out of the list of the 20 largest markets for Greek products.

In 2013 exports from Greece to Russia were worth € 406 million, about 1.5% of the total Greek exports. The percentage may seem small, but there are entire sectors that depend directly on the Russian market. Russia accounts for 50% of Greek exports of strawberries, 25% of exports of peaches, and 45% of exports of leather, for which it is the largest market.

Tags: embargo export Russia exporters fruits vegetables
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