AS E-Piim, Estonia's largest cheesmaker, was declared bankrupt earlier this month, leaving many suppliers unpaid and forcing herd reductions.

The Ivaski farm in Antsla, Võru County, is owed nearly €50,000 in milk payments by the cooperative owned by E-Piim. The farm has started sending animals to slaughter to cover operating costs, owner Karmo Põder said.

"We have been covering these monthly expenses simply by looking at the list of animals and making choices. The easiest way is to sell animals; there's nothing else to take from," Põder said.

Meanwhile Klaarika Hirv, owner of the Kõrgemäe farm, in Võru Municipality itself and who attended Monday's meeting held by the E-Piim-owned milk cooperative, said they are owed even more — €60,000.

E-Piim had been the sole cooperative to buy from smaller suppliers, leaving the latter with little choice on who to sell to, and meaning recovery of funds owed seems unlikely.

"Our conclusion is that it's not really going to be viable for us to get that money — that message was clear. Of course, we hope for the better, but that's the situation. It is tough because we have again sent four animals to slaughter; meat prices are good, and that lets us get through another month. What will happen next month, we don't yet know," Hirv noted.

"We have called [Finnish dairy concern] Valio, we have called [Estonian dairy producer] Tere, but no one is buying our milk, and that's why we are stuck. There are about 40 producers like us who are putting their heads together, wondering what will be next," Hirv added.

Triinu Koor, owner of Metsküla Piimamees operating in Põlva County, had been part of the E-Piim cooperative for almost 11 years, and the sums the cooperative owes for milk are also significant for the company. Some suggestions have been unhelpful too, Koor said. "One thing was downright absurd — they suggested taking out a loan, a working capital loan, or selling our farmland so that at some point, if things get better — if they get better — we could buy it back," Koor said.

Another farm owner, Ole Musting, of Külmsoo farm near Põlva, said that although they sell their output to Lithuania, E-Piim's bankruptcy has exerted a downward pressure on milk purchase prices across the Baltic states market.
"Milk processors who use this option are taking advantage, since they don't need as much milk themselves, allowing them to impose prices on others that are significantly less favorable," Musting said.

A court declared AS E-Piim Tootmine bankrupt on March 11, a month after filing, and appointed Indrek Lepsoo and Olev Kuklase as trustees. This followed failed negotiations among owners to secure new capital, and the company's CEO Anti Orav confirmed lack of investment as the key reason for bankruptcy.

The proceedings will assess the company's finances, creditor recovery, and potential asset sales. Multiple companies have shown interest in acquiring the business through bankruptcy, while E-Piim says its functioning factory, workforce, and milk supply support finding a solution. The company employs nearly 200 people and operates facilities in Paide, Põltsamaa, and Järva-Jaani. Most of its output is exported.

E-Piim owes dairy producers nearly €30 million in total

"Aktuaalne kaamera" also talked to dairy farmers affected by the bankruptcy: Altogether E-Piim owes dairy producers nearly €30 million, the show reported.

Ennu Nurk, who runs a 70-head dairy herd near Türi, says he has never before not been paid for production. E-Piim now owes him a sum equal to over five months' turnover.

"At present, they owe us €120,000, or even a bit more," he said.
Nurk said he is still managing for now, after selling off some timber and old equipment in the fall. However, he can no longer afford to purchase new plant, he went on, and does not consider taking out a loan to be a rational option at this point in time.

"The state should ensure that we receive payment for our milk," he said. "If our future looks bleak, then taking a loan is of little use."

Meanwhile brothers Aimar and Allar Arusalu have dedicated their lives to the family business. The company, called Mürkal, currently has 120 dairy cows in its barn. Last year began on a hopeful note for E-Piim members, as the milk purchase price surged, Allar noted. In June, however, prices were cut, leaving producers concerned.

"At the same time, the 'commercial milk' of our processing plant did not see a drop in price. By the end of the year, we had reached a situation where payments for milk stopped altogether. We are owed roughly €175,000," he went on.

That sum represents about a quarter of the company's annual production value, he said, noting while Mürkal does not currently require major investments, it nevertheless had to apply for a loan from the Rural Development Foundation (MES) to ease its shortage of working capital. This is a last-ditch move however, due to the high interest rates MES loans carry.

"MES loans come with exorbitant interest rates. We have never taken a loan with such a high rate before, but thanks to that loan, none of our planned activities will be left undone," Arusalu said.

Both Arusalu and Nurk are supervisory board members of the SCE E-Piim cooperative, related to AS E-Piim, which has declared bankruptcy.

An SCE E-Piim dairy cooperative annual general meeting took place Monday at E-Piim's new dairy plant in Paide. The proposal was made that the supervisory board sell off E-Piim's Latvian subsidiary's dairy plant, to get payments to producers going again.

"The supervisory board will make a decision in written proceedings on whether to sell Jaunpils or not. As we are in a pre-restructuring situation, any revenue or sale of assets provides an opportunity to reduce the outstanding milk debt," said Peep Peterson, CEO of the SCE E-Piim dairy cooperative and a former health minister with the Social Democrats.

Editor's note: This piece was updated to include the "Aktuaalne kaamera" reportage.

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