Intense competition for raw material, changing consumer demand and internationalisation are potent forces shaping the global dairy industry today. The creation of strategic alliances to penetrate product or regional markets is a growing phenomenon, raising important questions with respect to competition policy. In this highly pressurised environment, what is the outlook for the dairy industry in Estonia, Latvia and Lithuania? Impending EU accession offers the Baltic countries a unique window of opportunity to accelerate consolidation and to create a more economically viable and sustainable dairy sector. Medium-term market prospects for dairy are favorable, with strong demand emanating from key import markets, especially South east Asia. to exploit these favorable opportunities, small dairy-exporting countries like the Baltics face major challenges and choices with respect to their approach to industry ownership and the maintenance of competition. Crucial to the outlook are the success of industry restructuring, the development of nich markets for local specialties and higher-value dairy products and, possibly, the creation of a regional or pan-Baltic dairy industry.
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