Factors affecting food exports to Russia are double tariffs, economic and political instability. The integration of Estonia in the European Union will eventually open the EU market. With Estonia s accession to WTO, trade with Russia is expected to increase. This would be main source for the increase of production, since considerable growth in the domestic market is not expected. Food processing industry may meet a shortage of local raw materials, resulting in an increase in production costs.
Producers have to find alternative markets or increase the efficiency of the production process.
Another industry trend is constant concentration of producers the market is mainly divided between larger producers. The companies are constantly investing in the modernisation of the technology to meet the respective EU standards. This is the field where many companies would welcome foreign investors. In addition, a buyer with an access to the distribution channels in western markets is most valued among the food producers. No income tax on reinvested profits Dairy industry Dairy industry is the biggest sub-sector, its share has been increasing constantly during the last years.