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by John Helmer in Moscow

The attempt last week by Russia’s consumer protection agency to halt all imports of Belarus dairy products on technical labeling grounds has been called off, after an agreement was reached between Moscow and Minsk to impose a quota on imports of dry milk shipments, and increase the tonnage of imported Belarussian cheese, yoghurt and other dairy products.

Industry sources in Belarus and Moscow believe that two of Russia’s largest dairy companies, Wimm Bill Dann (WBD) and Unimilk, sought to improve the pricing and profitability of their dry-milk business by blocking the low-price Belarus imports. WBD is owned by David Yakobashvili; Unimilk by managers, who acquired their stakes from Roman Abramovich.

Last week, Russian politicians, including President Dmitry Medvedev, issued personal attacks on Belarus president Alexander Lukashenko, who responded in kind. The import ban was an orchestrated political campaign against him personally, Lukashenko charged. Prime Minister Vladimir Putin then said at yesterday’s cabinet meeting that Russian officials “need to be accurate in their statements. To offend someone is not the best option. We and Belarus, whatever happens, are part of one family.”

After Putin and other officials claimed that Belarus dry-milk imports would be lowered from 110,000 tonnes to 70,000 tonnes annually, the Russian Minister of Agriculture Elena Skrynnik revealed yesterday that dry-milk imports from Minsk will be halted for six months, while the volume of other dairy imports will be permitted to increase from 110,000 tonnes to 132,000 tonnes.

The disclosure of trade lobbying over the price of Beralus dry-milk imports was implied in statements by Skrynnik to the cabinet session, when she said the new deal “will give the opportunity to our agricultural producers to sell Russian milk at proper and understandable prices”. She revealed that the government in Minsk had signed an agreement, according to which “volumes of imported dried milk, which is delivered to us under low, inadequate prices” have been halted.

A Moscowindustry expert told Agriprods.com that the Russian dairy lobby is dominated by WBD and Unimilk, and that apart from them, “the rest of the market is non-consolidated small producers, without political influence.” He said he suspects that “the game of big political figures in the government” had been prompted to benefit Russian attempts to acquire Belarus companies at low price. He also said that lower-level Russian officials had fabricated the reasons initially used to halt the milk imports.

A source at one of Belarus’s leading milk exporters to Russia, Savushkin Products, told Agriprods.com: “Initially, there was a conversation about introduction of a quota for dry milk shipments from Belarus to Russia, and about an increase of shipments of cheese, curds, yoghurt and other products. Then, by the initiative of [consumer protection agency regulator Gennadiy] Onishenko, the shipments were halted entirely.”

“I want to ensure you and the Russian market that our products fully correspond to all possible standards. They are on the same level of quality as Wimm Bill Dan and Danone. Besides, we never dump in the market with low prices. For the whole long history of our relations with Russia, we have never had a single claim of bad quality, or anything else.”

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