Iran 'a potential target market' for Russian embargo dairy surplus: Euromonitor

16-Jul-2015 - Last updated on 17-Jul-2015 at 16:11 GMT

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Iran could become a target market for the dairy surplus created by the Russian embargo if Western economic sanctions are lifted, says Euromonitor.

Earlier this week, Iran sealed a deal with the US, UK, France, Germany, Russia and China to significantly reduce its nuclear infrastructure. In return, the US, the European Union (EU) and the United Nations (UN) has vowed to gradually lift economic sanction slapped on Iran in recent years.

In a July 14 blog post, Lianne van den Bos, analyst, Euromonitor, said the removal of US and (EU) sanctions on Iran would "open up the tenth largest growing dairy market globally."

“Considering the fact that the Russian market is currently inaccessible to many dairy exporters with Putin’s extension of the important ban on dairy, Iran could be a potential target market for dairy products initially intended for the Russian markets," she wrote.

Iran high on the agenda?

Western dairies impacted by the Russian embargo on Western food imports, such as Arla Foods, Valio and FrieslandCampina, are likely salivating at the prospect of access to the Iranian market, van den Bos told DairyReporter.com..

"There's a lot of over production at the moment," she said, "so Iran could be a target market for those products."

"Internally, I am sure it is high on the agenda, but we haven't seen anything yet because they're still trying to work our the details. And it is yet to be seen when these sanction will be lifted."

"We still need to see when that will happen, but I can imagine many companies are already looking into Iran."

Unpackaged to packaged

A young population - around 40% of the population of nearly 80m is aged between 15 and 34 - and an increasingly "open attitude" to packaged food makes Iran a "huge untapped market," said van den Bos.

"Dairy already makes up a huge part of the Iranian diet," van den Bos, identifying cheese ad yogurt as the largest two categories.

"You wouldn't have to convince them to consumer more dairy," she said, "just convince them to consume more dairy in a packaged format."

In the case of yogurt, she said, Iranian families traditionally make it at home.

"There has already been a shift from unpackaged to packaged," he said. "But it's not something that happens overnight."