A ban on food imports imposed by Russia is starting to affect companies in the UK.
Russian prime minister Dmitry Medvedev announced a "full embargo" on food imports from the European Union (EU), the US and other Western countries in a response to further sanctions put in place by the US and EU. The new rulings were put in place as tensions between Ukraine and Russia escalate following the alleged shooting down of Malaysian Airlines flight MH17.
UK firms are now feeling the bite from the food ban. There had been concerns when Russia announced the new legislation that it could impact on the UK. The nation's fishing industry was highlighted as an area which could bear the brunt of the changes. The Scottish Pelagic Fishermen's Association (SPFA) warned that jobs and exports could be put at threat once the ban is imposed.
According to 2013 National Farmers Union figures, the UK exports £115 million worth of produce, including alcohol to Russia. The fishing industry accounts for a substantial chunk of this revenue with Russia spending a £17 million on frozen fish a year. Peterhead in north-east Scotland does a huge amount of business with Russia with half of its annual turnover comes from exports to the country.
Sir Ian Cheshire, chief executive of Kingfisher, owner of B&Q, warned that its operations could be affected should the ban persist. He explained that even the larger companies could feel the pinch but was confident that his own company would be able to overcome the issues in the long term.
Speaking to BBC Radio 5 Live, Mr Cheshire said: "We're clearly concerned that if it went further it would impact us and we're just having to wait and see and also try and switch where we can to more domestic sources [for products]. But the market longer-term for us there is still a solid one."
Find up to date information on spread betting strategies at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.