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Russia's sanctions begin to bite

Thursday, August 21, 2014 - 02:15

Carlsberg's profits fall and Greek farmers are left with a glut of fruit thanks to a weak Russian economy and a food ban. Hayley Platt looks at the impact the Ukraine crisis is having on European trade and business.

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++NOTE TO EDITORS: THIS EDIT REPLACES 3016-EUROPE-SANCTIONS IMPACT - CORRECTING 180,000 EUROS, WHICH SHOULD READ 180 MILLION EUROS ++ Carlsberg relies on Russia for 35% of its profits and the Ukraine crisis is beginning to hurt. The Danish brewer has warned operating profit will be lower than last year - shares fell almost 6% as a result. Sanctions are not directly to blame in Carlsberg's case - it's more about Russia's weakening economy. But for other European companies sanctions are starting to bite. Russia is Greek farmers' biggest export market. Last year they sold fruit worth 180 million euros to the country. Russia's one year ban on meat, fish, dairy, fruit and vegetables has resulted in a glut at home and big price reductions. Christos Yannakakis is a fruit exporter. (SOUNDBITE) (Greek) FRUIT EXPORTER AND IMATHIA PRODUCERS ASSOCIATION CHIEF CHRISTOS YANNAKAKIS SAYING: "60 percent of our peaches went there, as did more than 50 percent of our kiwi fruit and over 90 percent of our strawberries. Therefore, it's much more than just some place we export to, as it is for Italy or Spain." Greece's fruit export association says EU compensation isn't nearly enough. And there are fears other struggling euro zone countries could suffer too. Russia is a big customer for Spanish oranges. Italy's cheese shipments have recently been rejected as has a shipment of pears from Modena. Michael Hewson is from CMC Markets. SOUNDBITE: Michael Hewson, Market Analyst, CMC Markets, saying (English): "Greece more than any other euro zone country really needs this export market, simply because it's probably one of the economies that's got further to go in terms of economic recovery." But the whole of Europe is feeling the impact. One survey suggests almost half of Finland's companies are suffering - particularly department store chain Stockmann. Norwegian salmon prices are falling. And energy firm EON and auto maker Daimler are just two German firms being hit. One German organisation estimates 25,000 jobs are at risk as a direct result of the sanctions. With talk of more sectors being included and no sign of any solution to the crisis it's a worrying time. But there is one big winner in Europe - Switzerland is not in the EU and is exempt from the sanctions Cheese loving Russians are swapping mozzarella and parmesan for Emmenthal and Gruyere.

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Russia's sanctions begin to bite

Thursday, August 21, 2014 - 02:15