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Swiss dairy producers look to new markets in the European Union

(Keystone)

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 which is eager to exploit closer ties with the European Union is the dairy industry.

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 25 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 knows it has to be selective about what it tries 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 a lot of this."

Swiss Dairy Food is focusing 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 bilaterals will put us in a good situation, they are a must for Switzerland."

But how would Swiss Dairy Food be affected if the bilaterals were 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 Imogen Foulkes

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