Finnish dairy industry threatened by cheap imports from new EU countries
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Imports from the new EU countries are weakening the profitability of Finnish dairies. Yoghurt is being imported from the Baltic States, while cheese comes from Poland. The Finnish cheese market in particular is in turmoil because of the low-cost imports.
This year, some 33% of Edam, the Finns' favourite cheese, comes from abroad from countries such as Poland, Germany, and Denmark. Especially the cheap Polish Edam is unsettling the market.
Finnish dairies find it impossible to compete with their Polish rivals, as milk in Poland is 50 percent cheaper than in Finland.
Even in Germany the production cost of milk is a third lower than in Finland. The Finnish dairies' cost-effectiveness has already been maximised, but Finland still falls short in the cheese price war.
The fate of the Milka dairy in Pedersöre in Western Finland sums up the problem. Last year the dairy's production reached a record-high 22 million litres of milk, two thirds of which was then processed into cheese at the Kaitsori cheese production unit.
Problems started when the current consumer goods central organisations running Finland's major retail chains informed Milka that its EUR 4.95 per kilo price tag was too high. Grocery stores were selling Polish Edam for EUR 3.95 per kilo.
Milka did not have a choice but to join forces with competitor Valio. Milka's own dairy was shut down and its equipment is being sold piecemeal to Russia, where it will be re-assembled. A dog food factory will move into the former dairy building.
Milka was turned into a supplier co-operative, the role of which is to collect milk for Valio's dairies. Thirty-three employees were laid off and the Milka consumer brand has ceased to exist.
Helsingin Sanomat
