Russian Goods Banned

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Imports require alternatives

Several Lithuanian supermarket chains have announced they will stop stocking Russian products, a reaction to Moscow’s invasion of Ukraine. However, industry representatives say they would be hard-pressed if they had to give up raw materials from Russia.

Norfa is one of the supermarket chains in Lithuania that decided to give up importing Russian products. Dainius Dundulis, the head of Norfa, noted that the company does not stock many Russian products, but has more Ukrainian ones. Norfa already stopped importing Belarusian goods after Minsk hijacked a Vilnius-bound Ryanair flight in order to arrest a Belarusian dissident last May. Some shoppers have enquired about the removed Belarusian products and Norfa expects that some will miss Russian goods too.

Maxima, Lithuania’s biggest supermarket chain, is also giving up Russian and Belarusian products, according to the company’s communications chief Ernesta Dapkienė. Maxima will also suspend further orders from suppliers in those countries. Alcohol accounts for the bulk of Russian products sold by Maxima, according to Dapkienė.

The Lithuanian Confederation of Industrialists (LPK) says that Lithuania has not been exporting much to Russia since 2014. However, many Lithuanian manufacturers are dependent on Russian imports of fossil fuels, metals, and timber. President of the LKP, Vidmantas Janulevičius, says businesses should diversify their risks and look for alternatives. Finding alternatives to energy resources will be difficult, but there is willingness to talk with Asian countries and the Middle East for alternatives, he said

Businesses would be particularly hard-pressed if they were cut off from Russian gas, according to Janulevičius. This could happen, if Russia were disconnected from the SWIFT global interbank payments system.

SEB Bank economist Tadas Povilauskas says that exports of Lithuanian-made goods to Russia were rather small, about 370 million euros or 1.7 percent of the total. However, giving up Russian imports would be a challenge. “If we include energy imports, they totalled 4.6 billion euros in 2021 or 12 percent of our total imports,” he said. “If there are disturbances or restrictions, we will feel it.”

Orlen Lietuva, an oil refinery in northern Lithuania, would be hit hard, for example, as it mostly processes Russian oil. However, cutting other imports – timber, metals, fertilizers – would be painful in the short term as well, according to Povilauskas. “The markets for these raw materials have been tight recently. If imports from Russia disappeared, it would be difficult to find new partners immediately.”

However, according to Andrius Romanovskis, the president of the Lithuanian Business Confederation, cutting all ties with Russia and Belarus is something that Lithuanian companies should do. “It is evident that one should do business only in a safe environment, safe country, a functioning state.”  LRT.lt