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#FoodUnion launches digital tool for #Latvia dairy industry

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Since their emergence in 2012, pan-European dairy and ice cream company Food Union have placed an emphasis on consistent innovation to maintain their place at the top of the industry. The latest example comes in the form of the interactive platform Smart Dairy Farmer, introduced in May with the stated goal of helping the Latvian dairy industry become more efficient, more innovative and more technologically advanced.

Food Union’s owes its current status as an innovative, market leader in part to the support of founding investor Meridian Capital Limited. Meridian Capital is an international investment firm headquartered in Hong Kong with a diversified investment portfolio spanning consumer goods, real estate, hospitality, infrastructure and natural resources.

In 2003, Meridian helped back a management buyout of a Unimilk, a dairy company in Russia. Askar Alshinbayev, founding partner of Meridian Capital Limited, was a Board Member of Unimilk from 2006 to 2010 and was central to its development from 3 dairy factories into the #2 dairy company in the CIS and thereafter its merger with Danone Russia.

Building on the success of Unimilk in Russia, Meridian Capital Limited backed long-term partner Andrey Beskhmelnitsky who in 2011, consolidated the production capacities of two Latvian enterprises to create Food Union.

Today, a strong connection to the group’s suppliers, which include hundreds of farms in the European dairy belt, underscores Food Union’s commitment to high standards and fine raw milk. By creating the new digital tool Smart Dairy Farmer, Food Union has cemented its relationship with its suppliers. It is the first of its kind in the digital environment for Latvian farmers and is proving infinitely useful in keeping track of and analysing data on milk sold for processing and thus efficiently planning farm resources and operations.

Harijs Panke, deputy chairman of the Board at Food Union Group’s company Rīgas Piena Kombināts, expands on this strong, newfound relationship: "Transparency, traceability and loyalty are integral part of the dairy industry, so by sharing the data in a convenient and easy-to-use way – features that are at the heart of the new platform – we become more open as an organization, while our partners, the best farmers in Latvia, become even smarter and more progressive. This is an essential contribution to our mutual relationship. At the same time, it also sets a new standard for dairy business management and raises the industry, based on centuries-old traditions, to a modern level, also raising the bar higher not only for dairy farms and companies in Latvia, but also in the neighbour countries. I am calling on every user of the new tool to be active and give us feedback on its operation and desired improvements so that its functionality becomes even more handy and useful."

Far from resting on any laurels, which could inevitably come from an annual turnover of €280 million in 2018, Food Union continues to innovate and seek further success. It occurs domestically where relationships with suppliers continue to strengthen through technological advancements such as Smart Dairy Farmer but also further afield where, last year, Food Union began production in two newly completed dairy factories in China off the back of Meridian Capital’s $55 million investment.

The new platform offers farmers, who have developed long-term co-operation with Food Union, access to crucial data such as the quantity of milk sold and the quality of its components, including milk fat and protein content. Farmers can also keep track of financial data with the help of the tool, including data on payment amounts the farmer has received and the total amount of milk sold, as well as his or her average milk price and how it correlates with the average market price.

More information on the release of the platform.

In seven years since its creation, Food Union has become one of the largest dairy and ice cream producing groups in Central and Eastern Europe with more than 2500 employees, factories in nine countries and suppliers which include hundreds of farms in Europe. The company exports to more than 25 countries, with the main markets being the Baltics, Norway, Denmark, and Romania.

Meridian Capital Limited has been a key partner from the start with responsibilities distributed as they had been in the Unimilk days. Over and above Meridian Capital’s financial commitment, managing partner Askar Alshinbayev deals with finance, investor relations and corporate issues.

The group entered China in 2015 with PAG, one of Asia’s largest private equity firms, investing $170 million alongside Meridian.

Commenting on Meridian’s investment of a further $55 million in 2017, Askar Alshinbayev, said: “Entry into China, which has one of the largest and fastest growing consumer markets in the world, is a significant step for Food Union. We are confident that working alongside with PAG, we can deliver on our strategy to manufacture European quality dairy products which demanding Chinese consumers can enjoy and trust.”

The Meridian Capital and PAG investment in Food Union was named Baltic Private Equity/Venture Capital Deal of 2017.

Aviation Strategy for Europe

Boeing subsidy case: World Trade Organization confirms EU right to retaliate against $4 billion of US imports

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The World Trade Organization (WTO) has allowed the EU to raise tariffs up to $4 billion worth of imports from the US as a countermeasure for illegal subsides to the American aircraft maker, Boeing. The decision builds upon the WTO's earlier findings recognizing the US subsidies to Boeing as illegal under the WTO law.

An Economy that Works for People Executive Vice President and Trade Commissioner Valdis Dombrovskis (pictured) said: “This long-awaited decision allows the European Union to impose tariffs on American products entering Europe. I would much prefer not to do so - additional duties are not in the economic interest of either side, particularly as we strive to recover from the COVID-19 recession. I have been engaging with my American counterpart, Ambassador Lighthizer, and it is my hope that the US will now drop the tariffs imposed on EU exports last year. This would generate positive momentum both economically and politically, and help us to find common ground in other key areas. The EU will continue to vigorously pursue this outcome. If it does not happen, we will be forced to exercise our rights and impose similar tariffs. While we are fully prepared for this possibility, we will do so reluctantly.”

In October last year, following a similar WTO decision in a parallel case on Airbus subsidies, the US imposed retaliatory duties that affect EU exports worth $7.5bn. These duties are still in place today, despite the decisive steps taken by France and Spain in July this year to follow suit Germany and the UK in ensuring that they fully comply with an earlier WTO decision on subsidies to Airbus.

Under the current economic circumstances, it is in the mutual interest of the EU and the US to discontinue damaging tariffs that unnecessarily burden our industrial and agricultural sectors.

The EU has made specific proposals to reach a negotiated outcome to the long running transatlantic civil aircraft disputes, the longest in the history of the WTO. It remains open to work with the US to agree a fair and balanced settlement, as well as on future disciplines for subsidies in the civil aircraft sector.

While engaging with the US, the European Commission is also taking appropriate steps and involving EU member states so that it can use its retaliation rights in case there is no prospect of bringing the dispute to a mutually beneficial solution. This contingency planning includes finalizing the list of products that would become subject to EU additional tariffs.

Background

In March 2019, the Appellate Body, the highest WTO instance, confirmed that the U.S. had not taken appropriate action to comply with WTO rules on subsidies, despite the previous rulings. Instead, it continued its illegal support of its aircraft manufacturer Boeing to the detriment of Airbus, the European aerospace industry and its many workers. In its ruling, the Appellate Body:

  • Confirmed the Washington State tax programme continues to be a central part of the S. unlawful subsidization of Boeing;
  • found that a number of ongoing instruments, including certain NASA and U.S. Department of Defence procurement contracts constitute subsidies that may cause economic harm to Airbus, and;
  • confirmed that Boeing continues to benefit from an illegal U.S. tax concession that supports exports (the Foreign Sales Corporation and Extraterritorial Income Exclusion).

The decision confirming the EU right to retaliate stems directly from that previous decision.

In a parallel case on Airbus, the WTO allowed the United States in October 2019 to take countermeasures against European exports worth up to $7.5bn. This award was based on an Appellate Body decision of 2018 that had found that the EU and its Member States had not fully complied with the previous WTO rulings with regard to Repayable Launch Investment for the A350 and A380 programmes. The US imposed these additional tariffs on 18 October 2019. The EU member states concerned have taken in the meantime all necessary steps to ensure full compliance.

More information

WTO Appellate Body ruling on US subsidies to Boeing

Public consultation on preliminary list of products in the Boeing case

Preliminary list of products

History of Boeing case

History of Airbus case

 

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Business

No need to rush - This autumn is not the time for premature, short-sighted decisions

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Abraham Liu, Huawei Chief Representative to the EU Institutions (pictured).

"Very much like the rest of 2020, this autumn and winter will also be different from normal times. Regrettably, the Coronavirus Pandemic will continue to test our resilience and adaptability for the foreseeable future. As we enter Europe’s cold season, many among us will be anxious about the months ahead. Yet as in every complicated situation, there is also hope" - writes  Abraham Liu, Huawei Chief Representative to the EU Institutions

"Looking at what we have jointly achieved in the earlier part of 2020, I cannot but also be optimistic: progress on vaccines is coming along impressively. We have been able to curb the mortality of the virus. Overall, we now know so much more about this disease than we did in March. Yes, the weeks ahead will be difficult. But I am confident that all over Europe, we will overcome the virus and we will return to normality.

The other day I visited the House of European History in Brussels. History, and Europe’s tumultuous history in particular, teaches us that nothing can be taken for granted. At numerous times in the past, humanity has experienced a loss of knowledge and technology. It then took enormous efforts and a very long time to get back what had been stupidly destroyed. Let me be clear: There exists no automatism that we can retain our current level of technological development. Without stability and predictability, there is no progress. If the Pandemic teaches us something, it is that technology is humankind’s best ally to beat the virus and also to prevent similar viruses threatening us all in the future. We have no other viable option but to invest in technology and to bank on progress!

Whether the United States and China have now entered Graham T. Allison’s famous “Thucydides Trap” is not for me to judge. What I do believe and advocate though is that Europe has a key role and responsibility in ensuring stability in the months ahead. European Commission President Ursula Von der Leyen and European Council President Charles Michel rightly point out that the EU is not an object, but a subject in international relations. International companies such as Huawei need a strong Europe to shape an inclusive tech-world of tomorrow. A world in which Europe leads on tech-regulation and in which new technologies are deployed in line with European values and principles.

The European Union can only be strong if its 27 Member States also stand up to its principles and do not give in to short-term pressures. The EU toolbox on 5G Cybersecurity is an intelligent and encompassing approach which gives EU countries appropriate time to come to their conclusions. This solid European method should not be undermined by third parties ahead of elections. Wherever European governments receive pressure these days to go down the path of potentially discriminatory actions violating EU law, I would like to tell them: take a deep breath. Do take your time. Do not rush into actions you might not have thought through.

Let me be clear: Huawei is deeply committed to Europe. We are here to stay and we will invest heavily in Europe’s ICT ecosystem. In the last 20 years, Huawei has decisively contributed to the successful digital transformation of societies all across Europe. Just look at Poland and Romania: in both countries Huawei has provided secure, fast and affordable telecom networks that are the backbone of the impressive economic growth both Poland and Romania have experienced in recent years. In Warsaw and in Bucharest, Huawei has set up large regional operations employing thousands of people.

Huawei has the know-how and the determination to team up with the European Union as a key partner to deploy global standards on Cybersecurity, to make the European Green Deal a reality and to partner with the continent’s automotive industry to jointly reinvent mobility.

I believe that in the not too distant future we will be looking back on the year 2020 as a moment of accelerated transition where some key players took a longer breath to take the right decisions when history called upon them. Take this deep breath and think for a moment before giving in to short-sighted pressure! "

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Cyber-espionage

EU countries test their ability to co-operate in the event of cyber attacks

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EU member states, the EU Agency for Cybersecurity (ENISA) and the European Commission have met to test and assess their co-operation capabilities and resilience in the event of a cybersecurity crisis. The exercise, organized by the Netherlands with the support of ENISA, is a key milestone towards the completion of  relevant operating procedures. The latter are developed in the framework of the NIS Co-operation Group, under the leadership of France and Italy, and aim for more coordinated information sharing and incident response among EU cybersecurity authorities.

Furthermore, member states, with the support of ENISA, launched today the Cyber Crisis Liaison Organization Network (CyCLONe) aimed at facilitating cooperation in case of disruptive cyber incidents.

Internal Market Commissioner Thierry Breton said: “The new Cyber Crisis Liaison Organization Network indicates once again an excellent cooperation between the member states and the EU institutions in ensuring that our networks and critical systems are cyber secure. Cybersecurity is a shared responsibility and we should work collectively in preparing and implementing rapid emergency response plans, for example in case of a large-scale cyber incident or crisis.”

ENISA Executive Director Juhan Lepassaar added: "Cyber crises have no borders. The EU Agency for Cybersecurity is committed to support the Union in its response to cyber incidents. It is important that the national cybersecurity agencies come together to coordinate decision-making at all levels. The CyCLONe group addresses this missing link.”

The CyCLONe Network will ensure that information flows more efficiently among different cybersecurity structures in the member states and will allow to better coordinate national response strategies and impact assessments. Moreover, the exercise organized follows up on the Commission's recommendation on a Coordinated Response to Large Scale Cybersecurity Incidents and Crises (Blueprint) that was adopted in 2017.

More information is available in this ENISA press release. More information on the EU cybersecurity strategy can be found in these Q&A and this brochure.

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