U.S. Markets close in 2 hrs 51 mins

Russia halts Lithuanian dairy imports before EU summit

A worker loads a packs of milk at a milk plant in Minsk, June 17, 2009. REUTERS/Vasily Fedosenko

By Steve Gutterman

MOSCOW (Reuters) - Russia suspended imports of dairy products from neighboring Lithuania on Monday, turning up trade pressure on the European Union member weeks before it hosts a summit that could pull former Soviet republics further from Moscow's orbit.

Russia's consumer protection agency cited quality concerns in an announcement of the suspension, which could hit Lithuanian producers hard. According to Russian figures, 85 percent of the small Baltic nation's dairy exports go to Russia.

The suspension adds to tension between Russia and Lithuania, which currently holds the EU presidency and is hosting a summit in late November promoting closer trade ties with six ex-Soviet states that are not members of the 28-country bloc.

Moscow is building its own trade alliance with former Soviet republics and is reluctant to see its neighbors, particularly Ukraine, slip further out of its sway by signing free-trade and political association agreements with the EU.

Lithuania, which borders the Russian exclave of Kaliningrad and joined the EU in 2004, has had transport trucks held up at Russian customs for up to 20 days at a time in recent weeks, causing heavy losses for its freight industry.

Taking aim at another sector, the Russian consumer protection agency Rospotrebnadzor said inspections of Lithuanian dairy imports had revealed "numerous violations" of quality and sanitary standards in products including cheeses and yoghurt.

"We are seeing a sharp weakening of (Lithuania's) position on protecting the rights and safety of consumers," Rospotrebnadzor chief Gennady Onishchenko said, according to the Interfax news agency.

Lithuania exported dairy products worth $193 million to Russia last year, according to the Russian National Milk Producers' Union - the vast majority of it cheese that is found on many shop shelves.

Russia is also stepping up monitoring of Lithuanian meat and fish imports, state-run news agency Prime reported, citing an unidentified source. Rospotrebnadzor declined to comment.


Onishchenko regularly denies any geopolitical motives, but past bans on products from ex-Soviet republics - such as wine and mineral water from Georgia - have been widely seen as a form of political pressure.

In Brussels, the European Commission said it had "complete confidence" in the quality of Lithuanian dairy products and called for discussions with the Russian side.

"The EU has the most stringent system in the world when it comes to food safety," Frederic Vincent, Commission spokesman for health and consumer policy, told a regular press briefing.

Of the 15 former republics that became independent states when the Soviet Union disintegrated in 1991, only the Baltic states of Lithuania, Latvia and Estonia have joined the EU.

But the EU's Eastern Partnership policy, designed to draw six other ex-Soviet states closer to the European fold, has run up against President Vladimir Putin's efforts to revive Moscow's sway by promoting closer ties among its former vassals.

At the Vilnius summit, the EU is scheduled to sign a political association and free trade accord with Ukraine and may take further steps towards such deals with Moldova and Georgia. Belarus and Armenia remain more closely aligned with Moscow.

Putin, who wants former Soviet states to join a Russian-led Customs Union, has warned Ukraine that Moscow would retaliate with protectionist measures if it signed a trade deal with the EU.

(Editing by Gareth Jones)