SUBSCRIBE

Breaking News on Supplements & Nutrition - EuropeUS edition

Headlines > Industry

Russian money laundering probe 'no relation' to Valio activities

Post a comment

By Mark Astley+

13-Aug-2014
Last updated on 13-Aug-2014 at 17:04 GMT

Russian money laundering probe 'no relation' to Valio activities

A Russian money laundering investigation that yesterday culminated in a search of Valio's St Petersburg office has "no relation" to the activities of the Finnish dairy, says the agency behind the raid.

The Investigative Committee of the Russian Federation (RFIC), sometimes described as the Russian FBI, confirmed reports yesterday that it had carried out a search at Valio's office in St Petersburg as part of an investigation into money laundering by a nationwide criminal organization.

Markin Vladimir Ivanovich, head of media relations, RFIC, said that the search was aimed at "gathering new evidence against the accused and has no relation to the company's activity whatsoever."

The RFIC investigation centres on claims that between 2011 and 2013 a criminal organization laundered more than 45m Roubles (US$1.25m, €930,000) using legitimate businesses in the country.

“During the investigation it was found that members of the criminal community under the guise of legitimate banking operations transferred funds to the accounts of more than 20 businesses, including those of Valio in St Petersburg,” said Ivanovich.

In a statement published on its Russian subsidiary website, Valio acknowledged that a search had been conducted at its St Petersburg office.

“On August 12 2014, the Investigative Committee of the Russian Federation searched the office of Valio LLC in St Petersburg. The RFIC has confirmed that the ongoing investigation is in no way associated with Valio," said the Finnish dairy.

“Valio carries out its activities in Russia in full compliance with the legislation of the Russian Federation and are ready to provide any information to authorized organizations."

Import embargo

Yesterday's RFIC search represents Valio's second setback in Russia in less than a week.

Last week, the Russian Prime Minister Dmitry Medvedev announced a complete ban on the import of beef, pork, fruit, poultry, cheeses and milk from the EU, US, Australia, Canada, and Norway.

Valio products, such as Valio Oltermanni cheese, Valio Viola cheeses, Valio Fin butter, account for more than 85% of all Finnish exports to Russia. Valio’s exports to Russia, valued at €242m (US$324m), generated almost 20% of the company’s revenue last year. 

Valio claims it will be “the hardest hit of all companies in Finland.”

Following Medvedev's announcement, the Helsinki-based dairy brought a halt to the manufacture of all products destined for Russia.

It acknowledged that this fall in production could lead to up to 800 lay-offs and the non-renewal of fixed-term contract at its Finnish plants in Haapavesi, Seinäjoki, Vantaa, and Lappeenranta.

Valio's Russian business has also begun preparations for a "gradual run-down" of operation as its current inventory "becomes exhausted and sales end."

Subscribe to our FREE newsletter

Get FREE access to authoritative breaking news, videos, podcasts, webinars and white papers. SUBSCRIBE

Post a comment

Comment title *
Your comment *
Your name *
Your email *

We will not publish your email on the site

I agree to Terms and Conditions

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.