FrieslandCampina loses €80 million on Russian sanctions
FrieslandCampina is reporting a hit to its operating profit of 80 million euros stemming from the Russian boycott on European dairy products. This works out to approximately 16 percent of the company’s 2014 operating profit, as reported on their website.
The figure suggested by the company includes direct losses in revenue and indirect negative market effects. Sales of branded cheese, one of the major revenue sources for FrieslandCampina, declined by 15% due to the Russian sanctions and increased competition in Europe.
In its 2014 annual report, the company suggested that even if Russian sanctions were to be ended in the near future, it would take time before demand for the company's products would return.
Russia imposed an import boycott on agricultural products from EU member states as well as several other countries across the world. The boycott was introduced as a response to sanctions against several Russian officials and companies in the wake of the conflict between Russia and Ukraine.
FrieslandCampina is a Dutch dairy cooperative and one of the largest producers of dairy products in Europe. It accumulated over 11 billion euros in revenue in 2014, and currently employs around 22,000 people.