Baltic Export, Baltic States – CIS, Foodstuff, Latvia, Markets and Companies

"The markets are fragmented. There is no single market importing huge amounts," he said, adding that many Latvian fish canneries were eyeing the U.S. market because it was vast and the purchasing power of the U.S. dollar was high. According to Babris, the Americans have taken a liking to the cans with transparent lids because it is a novelty to them.

At present there are huge production capacities standing idle in the Latvian fish processing industry and heavy dumping, with products being sold even below the cost price, he said.

The situation is different in the neighboring Baltic states. There is only one company making canned sprats in Estonia, but its output is small and it could not export its products to Russia, even if the embargo was lifted. Lithuania has one producer which is allowed to export its products to Russia but cannot have much effect on the Russian market because of its limited production capacity. Latvian-made sprats prevail in the fish product assortment at retail stores in Lithuania.

As to the Polish market, it is well-protected, Babris said. You cannot take this market with low prices alone because the Poles themselves make cheap canned sprats but those are not of high-quality. Brivais Vilnis exports to Poland its premium products.

Although Russia had been promising to lift the ban on imports of Latvian canned fish products, it has not happened and the Latvian companies were not expecting any positive changes, yet "hope dies last", the CEO of Brivais Vilnis said.

In August 2014, the Russian government put an embargo on imports of most food products from the EU, the US, Australia, Canada and Norway in response to the sanctions these countries have imposed against Russia for its aggression in Ukraine. The embargo applies to import of beef, pork, fruit and vegetable produce, poultry, fish, cheese, milk and dairy products.

In addition, on June 4, 2015, the Russian food safety authority, Rosselkhoznadzor, banned imports of fish products from Latvia and Estonia, citing breaches of veterinary and sanitary standards.

Brivais Vilnis, indirectly owned by Latvian businessmen Valerijs Belokons and Vilorijs Belokons, is quoted on the Secondary List of the Nasdaq Riga stock exchange.