Russia will respond to the sanctions imposed against it by Western powers with rigorous retaliatory measures, President Vladimir Putin stated on Wednesday.Anxiety over the retaliatory sanctions of Russia has dampened the mood at several Finnish companies following the declaration of President Vladimir Putin on Wednesday that Russia will respond to the sanctions imposed against it by Western powers with rigorous retaliatory measures.

Russia, Putin said, is prepared to curb or even ban the imports of certain foodstuffs, agricultural products and raw materials from countries imposing sanctions against it.

The Kremlin is expected to release a list of the products targeted by the sanctions today, on Thursday.

In particular, the extensive restrictions would be a blow to the Finnish food industry. Last year, the value of Finnish food and drink exports to Russia stood at 405 million euros.

Valio is especially dependent on exports to Russia, it accounting for two-thirds of Finnish food exports to Russia, revealed Heikki Juutinen, the managing director at the Finnish Food and Drink Industries' Federation. The other roughly 30—40 companies exporting food and drinks to Russia, he viewed, should be able to find compensatory markets for their products.

“Exports to Russia have grown strongly even during the recession, and there's great potential for growth,” Juutinen said.

On Wednesday, reports about the products to be targeted by the sanctions were conflicting.

Vedomosti, a Russian business daily, reported citing government officials that the list will include vegetables, fruit and meat products – and possibly also cheeses and other dairy products. The imports of wines and baby food, in contrast, are not to be curbed.

Later on Wednesday, news agency Ria Novosti wrote that the Kremlin is set to prohibit the imports of foodstuffs from the United States altogether but only the imports of vegetables and fruit from the European Union.

For Valio, the more limited sanctions would be a relief.

Last year, the traditional Finnish dairy company derived an estimated 20 per cent of its net sales – over 300 million euros – from the sales of cheeses, yoghurts and other products in Russia. With the exception of the processed cheeses manufactured at its small plant in Russia, Valio products sold in Russia originate in Finland.

Spokespersons at Valio declined to comment on the matter until further details on the sanctions are released.

Similarly, the retaliatory sanctions would have a considerable effect on Stockmann, with roughly a quarter of the revenue of its seven department stores in Russia being derived from food sales. Fazer Bakeries, in contrast, would be largely unaffected by the import ban because 98 per cent of its products sold in Russia are also manufactured there, pointed out Petri Kujala, the managing director of Fazer Bakeries.

Anneli Ahonen, Pekka Hakala, Terhi Kinnunen, Roosa Murto, Henrik Suni – HS
Aleksi Teivainen – HT
Photo: Alexei Nikolsky / AFP