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Delicacies’ long road: how businesses have adapted to the embargo

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In autumn, trade turnover between members of the Customs Union increased three-fold. Delicacies which had been previously shipped directly from a manufacturer are now passing through customs in Belarus and Kazakhstan. Alexey Mikhalev followed the routes of products.

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Yuriy Zinchuk, host: “Leadership of the EU said on Tuesday that it has found no reason to change the current sanctions regime against Russia. That means that life under economic embargo is not over, and it concerns, undoubtedly, all of us. Some suffer more, some less.

I, for instance, haven’t noticed any changes at all. Nothing at all. Instead of jamon, which I hadn’t like anyway, I eat delicious ham from Belarus – it a lot tastier. Instead of Parmesan I eat cheese – don’t even know what kind, but it’s made domestically. But I have no right to impose my opinion.

Others consider the lack of delicacies in their fridges as one of the biggest tragedies in the life of modern-day Russia. It’s their right too, no argues. Let’s instead look at a different subject. Have all products under embargo really disappeared from the shelves of St. Petersburg’s grocery stores? I’ll answer straight away – no, not all. How do those get here? That is the delicacies’ long road surpassing the law and customs to the stores of St. Petersburg. Our observer Alexey Mikhalev with the details.

Alexey Mikhalev, reporter: “The main thing here is how you slice it. Whether this is Italian prosciutto ham or Spanish Jamon. There is even a profession in Spain – cartador, or jamonero. This job has been thriving in Russia during the 6 months of economic head-butting”

And it’s not even about masterful skills with a knife, when you can have an electric slicer. Its simpler – you can’t bring the whole pig’s leg into Russia, but if you cut it into see-through slices you can. Cold cuts. This term of the Soviet deficit times is experiencing a second birth, allowing to continue doing business absolutely legally. In spite of what seems to be a tough embargo.

Mikhail Rozhko, head of commercial realty department in international realty firm: “Entrepreneurs are called entrepreneurs because they can always come up with ideas to survive and make profit. Yes, a lot of retailers have found ways to surpass the import ban, they import it through Belarus”

Our tour through St. Petersburg’s stores draws a conclusion – there is no shortage of delicacies. Not because the reserves are still on sale. Products reach stores not in the whole, but in bits. And there’s a great deal of creativity about it. For instance, you cannot import raw fish. So it’s being shipped already prepared – cut in bits, marinated. But this is rather an individual creative approach. You can import in wholesale quantities and stay within the law.

Dmitry Prokofyev, vice-president of Leningrad region’s industrial chamber: “This is not a detour of sanctions; it is being done within the rules of the game. There is Customs Union, members of which went in it for privileges. And if Belarus uses it, then it’s not breaking any rules”

Nothing prevents Belarus or Kazakhstan, who practically have no borders with Russia, to profit on the current situation. In the 1st months of autumn, importers from Belarus expanded their turnover threefold. 

The scheme is simple – trucks deliver products from France to Belarus, there the products are loaded onto local trucks and head to Russia. Or they use the so-called transit to Kazakhstan – and the products never reach it, ending up at Moscow’s and St. Petersburg’s stores. The flow of products from the Balkans also increased, having put aside their main competitors – the under-embargo Spain and Greece.

Konstantin Kozlov, head of North-Western Customs Control: “For instance, from Macedonia and Serbia we receive a lot of fruits. Fish from the Faroe Islands, shrimps from Greenland. And participants here will expand from Serbia and Macedonia. Kenya will be on the list too

There have been violations too – during the times of the embargo, the Federal Customs Service blocked 740 shipments at the border, that’s 18 thousand tons of foodstuffs. But, generally, businesses try to live by the new rules, showing flexibility even in such a delicate sphere as commercial realty sales in St. Petersburg. Which has been experiencing significant losses in the past 3 months.

Mikhail Rozhko, head of commercial realty department in international realty firm: “We’ll survive this. We’ve been through worse crises and we know how to handle ourselves. Will we become stronger after this? I think we will. The main thing is that we must become stronger using our own resources, but we mustn’t forget that we are part of the global community and must not fence ourselves from our partners both in the West and the East”

It turned out that we can count on ourselves. Buying technologies allows producing anything – even mozzarella. Monks of the Valaam Monastery are going to produce parmesan cheese. The problem is that farming is not a technology; it cannot appear out of the blue.

Dmitry Prokofyev, vice-president of Leningrad region’s industrial chamber: “The process of replacing products from Western Europe with products from other regions has begun. But those are imported goods, local manufacturers have not been up to speed. Agriculture has a peculiarity – it cannot be rapidly increased. It’s a gradual process”

Alexey Mikhalev, reporter: “Frankly speaking the “Buy Local” slogan appeared some time ago. The entire post-war global economy was built on those “Buy American” and “Buy Japanese”. Even today you won’t find many in France who buy imported groceries. And now – in this perverse way – this slogan has reached Russia. Which is good to some extent, but doesn’t answer one question – why didn’t it reach us before, during the times of open competition?”

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