CYPRUS: Customs raid puts €200 mln halloumi exports at risk

9 mins read

By Kyriacos Kiliaris

Cyprus’ traditional squeaky cheese, which accounts for EUR 200 mln in exports, is in for another bumpy ride as authorities appear to be clamping down on halloumi products which do not conform to government specifications, with authorities confiscating halloumi products and variants at Larnaca airport.

Two containers full of halloumi products on their way to Romania and Bahrain were confiscated by customs officials at the airport, under orders of a special ‘halloumi watch’ unit of the Ministry of Commerce.

According to news reports, the two containers were confiscated in an effort to clamp down on the sale of halloumi products which do not comply to guidelines, such as products containing milk powder, or in shapes and weight other than those of the benchmark type, flavoured products such as chili halloumi and ‘light’ and lactose-free products.

The latest development is not expected to go down well with dairy producers who will see a large portion of their exports slashed, directly hurting the sector that employs 12,000 people.

Dairy producers perceive the latest actions as a threat to the future of the industry and “will only bring about havoc in the industry”.

Talking to the Financial Mirror the Chairman of the Dairy Producers Association George Petrou said that the Ministry is endangering 35% of halloumi exports with its actions.

“More than a third of halloumi exports are made up of products such as halloumi burgers, flavoured halloumi and other similar products. The Ministry, by confiscating the containers at the airport, is essentially saying that these products are not halloumi. However, it has no problem boasting  about exporting halloumi products worth EUR 197 mln which include these products,” he said.

Petrou said that the Ministry is endangering 30 years of efforts made by the industry to bring exports up to a whopping 23,000 tonnes worth almost EUR 200 mln. “They are going to turn the clock back to the 1980s when the industry was exporting but a few tonnes,” commented Petrou.

He said that all these years, including the six of which the current minister of commerce was overseeing developments surrounding halloumi, producers were exporting these products with the blessing of the ministry.

“The same products the past six years were been classified as halloumi, today suddenly they are not?” asked Petrou.

The Chairman of the Association added that some 12,000 depend on  halloumi for a living. People working in the dairy industry, the farm industry and in exports will be affected.

“Furthermore, we will lose our credibility as producers and exporters. We have signed agreements with clients abroad. If we fail to deliver, we can be sure that not only we will be faced with legal sanctions, but we will also lose our credibility as exporters,” said Petrou.

An independent market observer finds that it will not only be the dairy producers who will be discredited, but the credibility of the whole country will be wounded as this has to do with state intervention.

“Dairy producers up to a few hours before the decision of the Ministry of Commerce to raid the containers and confiscate halloumi products, which up to that point they had no problem with, will surely make investors and potential buyers of Cypriot products be wary. This may put a strain on other industries,” commented the observer.


State could face lawsuits


As he explained, the state could also be faced with lawsuits from both the dairy producers who had their products confiscated and buyers from international markets.

“It is certainly not doing any good to halloumi as a national product of Cyprus. The state has on the one hand officially questioned halloumi products, and on the other hand it may have done irreversible damage to efforts to bring stakeholders together in an effort to protect the Cyprus traditional cheese’s origin,” he concluded.

As told by a Ministry of Commerce source, all halloumi products which do not follow the strict guidelines agreed between stakeholders back in 1985 are not considered to be halloumi, making their trade under the halloumi label, illegal. According to the guidelines, halloumi must be made with more than 50% goat or sheep milk, weigh no more than 300gr and must be folded the traditional way.

The Ministry of Commerce is also coming down hard on dairy producers who want to export or sell these products in the local market. As Energy Minister George Lakkotrypis has said in comments to daily Phileleftheros, dairy producers have received letters warning them that their products do not conform with the relative legislation.

Lakkotrypis told the paper that following the cancellation of the trademark in the United Kingdom, a special unit overseeing halloumi brands has been created under the auspices of the ministry’s permanent secretary. He explained that the unit has prepared a roadmap of actions regarding the Cypriot market and the foreign market. A few months ago, he added, audits were conducted in the market and letters were sent to dealers to adhere to the halloumi model.

The Ministry of Commerce source told the Financial Mirror, that the ministry is trying to put a stop to attempts to have international trademarks protecting Cyprus’ traditional cheese annulled. He said that a plot is afoot to make halloumi a generic product which can be produced anywhere in the world.

“In this battle we have to use every tool we have,” said the source who stressed that the aim is not to lose a Cypriot product which is second in exports. Total income generated from halloumi exports reached EUR 197 mln in 2018, while the target set is EUR 300 mln by 2023.

Cyprus lost its halloumi trademark in the UK last November on technical grounds, as due to a blunder by the government, Nicosia was late in making its case in the UK courts.

In effect, the competent authority, the Commerce Ministry had failed to present the country’s case in a timely manner with UK courts having no other option than annulling the trademark.

The source added that the Ministry of Commerce has stated on several occasions that the issue of Halloumi and its specifications will be resolved once the traditional cheese is recognised as a product specific to Cyprus through the approval of Protected Designation of Origin file pending before the European Commission since July 2014.

Procedures governing the future of halloumi as a Cypriot product, are languishing in the EU corridors, hampered by disagreements on the green line trade agreement which currently do not allow Turkish Cypriots joining in the halloumi trade.

Greek Cypriot producers are also concerned over the cows-sheep milk ratio specifications in the file which they say will hamper halloumi production and exports.

Producers currently make halloumi with a ratio of 80%-20% of cow’s to goat or sheep’s milk, while the description of the file says that halloumi should be produced with a minimum of 51% goat or sheep’s milk as of 2024.