Possible export ban on Russian hides worries Italian leather industry

MILAN, March 21 (Reuters) - Italy’s leather industry is worried about losing millions of euros if a possible temporary ban on exports of animal skins from Russia is enforced.

Home to handbag makers Prada and Gucci, Italy is Europe’s biggest producer of finished leather but less than 10 percent of the raw or semi-finished hides used in the industry come from Italian farms.

Russia is its fifth-biggest supplier, according to tanners’ association UNIC.

On Feb. 6, Russia’s Ministry of Trade and Industry posted a statement on its website saying it had added raw hides and tanned leather to a list of goods considered essential to the domestic market, which could become subject to temporary limitations or export bans.

The ministry could not be reached for comment.

The statement said the products were added to the list to enable limiting exports as domestic demand far outstrips supply.

It followed an announcement on its website last year of a draft resolution to ban exports of raw hides and skins for six months. It was not clear whether the resolution was ever passed.

UNIC says its members are very worried about a possible ban, and calculates a six-month break in supply would cost Italy’s tanneries 115 million euros ($159 million) in lost revenue.

Angelo Gerolimetto, co-owner and director of the Scamosceria del Brenta tannery in Vicenza, said a Russian supplier had told him a ban on exporting semi-worked or “wet blue” skins was highly likely to come into force on May 1.

“This is a real problem,” said Gerolimetto, whose tannery was founded by his grandfather in 1941, and now imports from Russia around 70 percent of the wet blue leather it works before selling on to clients, primarily shoemakers in Europe and Asia.

“I fear that something like this could place further pressure on raw material prices, which are already high,” said Gerolimetto, and he was worrying about being forced to buy lower-quality hides.

The fashion industry is seen as a bright spot in an Italian economy struggling to emerge from recession. The national chamber of fashion estimates clothes, shoes and accessories will bring in revenue of 62.5 billion euros in 2014. ($1 = 0.7255 Euros) (Additional reporting by Alessandra Prentice and Andrey Kuzmin in Moscow, editing by Mark Heinrich)