UK firms hurt by Russian embargo on food imports

UK firms have been hit by a Russian ban on food imports from a number of Western countries.

The tit-for-tat ban, imposed on Thursday, bars imports from countries which have imposed sanctions on Russia over the conflict in Ukraine.

"It will have a big impact on business," said Sinclair Banks, boss of fishing and fish processing firm Lunar.

The firm, based in Peterhead in north-east Scotland, exports 16% of its mackerel and herring to Russia.

Russia is the biggest market by volume for Scottish mackerel and herring

Mr Banks added that Lunar had already cancelled a boat exporting herring because of the sanctions.

Some 320 miles south, Shropshire cheese-maker Belton Cheese is also suffering.

Justin Beckett, managing director of the family business, said it had already had to cancel a £30,000 cheese order due to be sent to Russia on Monday.

"As you can imagine it's very disappointing. Russia was a very new market, about 2-3% of our business, but we had an expansion plan for the next two to three years."

Mr Beckett said this expansion had been expected to bring in up to £2m over the next three years.

Belton Cheese said it had expected the Russian market to be worth up to £2m over the next three years

Larger firms, such as B&Q owner Kingfisher, have also warned they could be affected.

Kingfisher chief executive Sir Ian Cheshire told BBC Radio 5 live it was "sensitive" towards any potential disruption.

"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," he added.

Waitrose managing director Mark Price told 5 live that Western goods due to be exported to Russia might now look to be sold in the UK.

"Europe's a huge market and Britain's just one part of it. But if they do find their way to the UK then that could well put some downward pressure on prices," he said.

M&S has 41 stores in Russia

Henderson Global Investors analyst Matthew Beesley said other British High Street firms, including Marks and Spencer and WH Smith, could also be affected.

"Marks and Spencer has about 4% of its operating profit currently sourced from Russia - they've got 41 stores there. WH Smith has just won a contract to sell newspapers in the railway stations across the country," he added.

Despite the negative impact of the ban on British firms, for consumers it may be positive,

"The banning of these exports does not mean the goods will not be sold or consumed elsewhere. Households are likely to benefit from the fall in food prices, helping free up income for other spending," Schroders economists Azad Zangana and Craig Botham wrote in an analyst note.