FOOD UNION INCREASES SALE OF DAIRY PRODUCTS BY 48% ONE YEAR SINCE EMBARGO

A year after the Russian embargo of dairy products, the leading milk-processing company in Latvia Food Union, with the help of promotional discounts by up to 30% for its products, achieved record sales volumes – by 17,000 tons or 48% more dairy products sold when compared to the previous year. The largest increase in sales volumes was for traditional milk products – milk, kefir, sour cream, cottage cheese, butter and fresh cheeses, which saw a near two-fold increase in sales volumes in Latvia.

“Achieving new sales records a year after we introduced discounts of up to 30% for our dairy products, shows that we have been able to partially overcome the impact of the embargo and adapt to the new situation. Thanks to the responsiveness of consumers and their loyalty to our products, we have been able to sell on the local market a substantial portion of milk supplied to use by local dairy farmers, which we were not able to process anymore to make products for the Russian market. The activity of consumers have helped us to retain the volume of fresh milk purchased from farmers, while at the same time offering one of the largest purchase prices for milk and making regular payments to our farmers. We see that the local market has grown the past year, and this is good news for the entire sector,” Normunds Staņēvičs explains, joint-stock Rīgas piena kombināts (Food Union Group) board chairman.

“At the same time, we still have much work to do in finding new export markets and improving our positions in current ones before we can say that we have completely overcome the closing of the Russian market. The road to the Chinese market is not a quick and simple one, but we are looking confidently towards the direction of China and the Middle East. For example, we will begin selling our ice cream products in Shanghai in the near future,” Staņēvičs added.

The most consumed Food Union product (between August 21 of last year and August 21 of this year) was Limbažu piens pasteurized milk, which was consumed by 68% more or 7.6 million more cartons than the previous year. Over the year, approximately 20 million cartons of Limbažu piens pasteurized milk cartons were consumed in Latvia.

The largest increase in consumption during this period was for the following products – Lakto yoghurt (+129% increase in consumption), Valmiera sour cream (+106%) and Rasa butter (+91%).

As reported previously, in connection with the Russian embargo of dairy products, Latvia’s leading dairy company Food Union reduced the price of all of its products on August 21, 2014 between 5% to 30%, with the aim of facilitating the sale and consumption of local dairy products. The discounts were introduced in all of Food Union’s most popular brands – Limbažu piens, Valmiera, Rasa, Rasēns, Mana Saeime and Lakto. These discounts have been in force for already a year, and will continue to remain in force as long as the global purchase price of milk remains critically low.