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Swiss dairy producers look to new markets in the European Union

As the vote on bilateral agreements with the European Union draws closer, the debate continues over what Switzerland stands to gain from the agreements. One sector of Swiss business, the dairy industry, is eager to exploit closer ties with the EU.

The last few years have not been easy for Switzerland's dairy industry. Milk subsidies have been reduced, and guaranteed prices for certain cheeses such as Emmentaler and Gruyère have been abolished.

Above all, Swiss producers don't have easy access to the lucrative markets of the European Union. Every kilogramme of Swiss cheese exported is subject to customs duty. But, if the bilateral agreements are approved, all that could change.

"The main advantage for us would be the reduction in customs duty for cheese,"
says Guido Eggli of Swiss Dairy Food, switzerland's largest producer of milk
products. "We definitely hope to be able to export more."

At the moment only 15 per cent of Swiss Dairy Food products are exported, but
the company hopes to increase this to 15 or even 30 per cent if swiss voters
say yes to the bilateral agreements.

"We have strategic targets," said Eggli, "our main markets are Germany, Italy,
and the Benelux countries, and we plan aggressive advertising campaigns for all
of them."

The management at Swiss Dairy Food know they have to be selective about what
they try to export. "Fresh milk products such as yoghurt, chocolate milk and
things like that won't work," said Eggli, "our milk prices are still too high
to be competitive. But we are developing new products which we are keeping
secret at the moment and we hope to develop export markets for these. And we
are Switzerland's largest producer of raclette cheese; I am very optimistic
that we will export alot of this."

Swiss Dairy Food is focussing on how the bilateral agreement governing trade
will affect business. The agreement on free movement of labour has not aroused
a great deal of interest. "So far our executive has not discussed employing
more EU nationals" said Guido Eggli, "obviously it might be a possibility in
the future, but we haven't really considered it. But we know the bilerals will
put us in a good situation, they are a must for Switzerland."

But how would Swiss Dairy Food be affected if the bilaterals are rejected?
"Well I expect them to be approved," said Eggli, "but if that did not happen
not only Swiss Dairy Food but the whole dairy industry in Switzerland,
including the dairy farmers would be the losers. It would be a big mistake for
our country."

So, Switzerland's largest producer of milk products is a firm supporter of
closer ties with the EU. There are no fears at Swiss Dairy Food that the
bilaterals might be bad for business, quite the opposite, this company is
impatient to compete in those lucrative EU markets.

by Immogen Foulkes

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