It’s not illegal to send food products to Russia, but many exporters are taking a stand against the invasion of Ukraine and boycotting the market. The Detail talks to one apple grower who’s stopped shipments about the complexity of that decision and what it means for business.
It’s March, and fruit and vegetable exporter Freshco has seven large containers full of apples being loaded onto a vessel in Napier. The vessel is bound for Russia. Halfway through loading, Freshco partner John Mangan hears the news that New Zealand is imposing sanctions on Russia over the war in Ukraine.
“Three of [the containers] were already on the vessel and going, and four we managed to get off,” Mangan says.
“Since then, we’ve stopped completely.”
It’s three months now since the war began and countries around the world started imposing sanctions worth billions of dollars. Companies from McDonalds to Fonterra have started pulling out of the country in self-imposed boycotts.
But not everyone has made that call.
New Zealand’s largest organic apple grower, Bostock, is continuing to send fruit to Russia. Owner John Bostock says the company condemns the Putin regime but backs the supply of “humanitarian food shipments” into Russia and Ukraine.
While it’s not illegal to send food products to Russia under New Zealand’s sanctions regime, many companies have withdrawn anyway, and at substantial cost to their business.
Fruit and vegetable exporter Freshco is one of those companies. They pulled the plug, leaving containers of outbound stock in the lurch, waiting on the wharf in Napier, to either be juiced or binned. But Mangan says it was the right thing to do.
Apples and pears are New Zealand’s second biggest export to Russia. In 2020, they were worth $19.8 million, a far cry less than our butter exports, valued at $115 million. Mangan says Freshco’s Russian trade was worth up to $6 million, but the economic environment created by Russia’s war on Ukraine has made continuing business a tough sell.
“Two or three of the larger shipping companies pulled out and won’t deliver there. But there are other shipping companies who will go there, and I’m sure we could probably organise a sale. It would be difficult to navigate ways through the banking system and get paid for them, but it’s probably possible. We’re allowed to send them…we have just chosen not to for other reasons.
“From our perspective, we don’t feel it’s the right thing to do. Every time you turn on the television, you see what’s happening in Russia.
“[The apples] are going to average, everyday Russian people – particularly in [East Russia], which is as far away from the war as you can get. But what can you do? It’s a moral thing.”
But how has Freshco’s decision been received by its Russian customers?
“It’s awkward, because our customers can’t understand why we should stop if we don’t have to stop. They’re not happy. They understand, from one aspect, where we’re coming from, but it’s not easy.”
Mangan says he hopes to restart the relationship if the situation ever eases up, but the Russian market is adapting to Western sanctions.
“Since this has happened, the Russian market has opened up to Chinese apples, surprisingly enough.
“It’ll probably mean that market for us, long-term, will be diminished.”
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