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UK firms feel bite of Russian food ban

Article By: ,  Financial Analyst
August 11, 2014 10:45 AM

A ban on food imports imposed by Russia is starting to affect companies in the UK.

Russian prime minister Dmitry Medvedev announced a "full embargo" on food imports from the European Union (EU), the US and other Western countries in a response to further sanctions put in place by the US and EU. The new rulings were put in place as tensions between Ukraine and Russia escalate following the alleged shooting down of Malaysian Airlines flight MH17.

UK firms are now feeling the bite from the food ban. There had been concerns when Russia announced the new legislation that it could impact on the UK. The nation's fishing industry was highlighted as an area which could bear the brunt of the changes. The Scottish Pelagic Fishermen's Association (SPFA) warned that jobs and exports could be put at threat once the ban is imposed.

According to 2013 National Farmers Union figures, the UK exports £115 million worth of produce, including alcohol to Russia. The fishing industry accounts for a substantial chunk of this revenue with Russia spending a £17 million on frozen fish a year. Peterhead in north-east Scotland does a huge amount of business with Russia with half of its annual turnover comes from exports to the country.

Sir Ian Cheshire, chief executive of Kingfisher, owner of B&Q, warned that its operations could be affected should the ban persist. He explained that even the larger companies could feel the pinch but was confident that his own company would be able to overcome the issues in the long term.

Speaking to BBC Radio 5 Live, Mr Cheshire said: "We're clearly concerned that if it went further it would impact us and we're just having to wait and see and also try and switch where we can to more domestic sources [for products]. But the market longer-term for us there is still a solid one."

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