Author Archives: CrispConsulting

Russian Retail Market 2016

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In 2016, large retail chains grew: Russia’s largest retailers Magnit and X5 Retail Group each opened about 2,000 new stores. Some smaller chains, such as Novosibirsk grocery chain Avoska, Petersburg chain of farm products Girlanda and others, left the market.

A number of companies changed the top management. Alexander Barsukov was appointed a new CEO of Tander (Magnit). Sergei Belyakov replaced Elijah Yakubson as a new president of Dixi retailer, but then a few months later he was replaced by Pedro Manuel Pereira da Silva.

There are reports that Vernij retail chain is selling some of its stores. Although the company denies it, it turned out that a few shops were actually sold to X5 Retail Group.

Meanwhile, retailers explored new markets. For example, many federal companies were interested in opening stores in Grozny, and in February 2016 Lenta retailer opened the first supermarket in the Chechen Republic.

Globus announced that it was going to invest 9 billion rubles in the construction of a retail park near Moscow. Estimated construction period is 2015 – 2020.

Metro Cash&Carry presented a new concept of shops Fasol Express, located at gas stations. The company plans to double the amount of stores every year.

Finnish company Stockmann is leaving the Russian market and closing ten Lindex stores. According to company estimates, the losses amounted to about 78 million euros. Executive Director of the Stockmann was going to resign after the sale of the business in Russia.

In June, Igor Shekhterman, Executive Director of X5 Retail Group, told about the plans of chain development: two most important regions for X5 are Siberia, where it is planned to open 150 stores over the next two years, and South Russia . The first stores are located in Novosibirsk in the stores, previously belonged to Avoska, which was forced to withdraw from the market. The network consisted of 12 stores.

In order to start supplying products to new regions X5 will build new distribution centers. “We have opened 35 distribution centers so far, and we are planning to open around 27 more in five years” – said X5 Retail Group CEO.

In September, premium retail chain Azbuka Vkusa launched a project of biometric payments, now customers can pay by placing a finger on the scanner.

In September, Forbes magazine published the rating of the largest private companies in Russia. Magnit took the first place, followed by X5 Retail Group.

In late October, Kesko Food Russia Holding announced that it would sell 11 K-Ruoka stores in St. Petersburg and Leningrad region to Lenta retailer for 11 billion rubles.

Auchan announced that Atak stores would be rebranded into Auchan store in the next 1,5 year. Also, Auchan in Moscow intends to build the largest distribution center in Europe. The venue will strengthen the retailer’s position in the Central region. In 2017, Auchan plans to increase its investment by almost half – up to 30 billion rubles.

Okey owners, Dmitry Korzhev, Dmitry Troitsky and Boris Volchek, who owned 78.97% of the company, decided to sell their shares. Among the main buyers there are Auchan, Lenta and, according to unconfirmed reports, Magnit.

In December, one of the leading Russian retailer Dixie bought 12 stores from 7th Continent.

www.retail.ru

Russia Bans Import of Produce from Burundi via Belarus

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The Russian Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) has imposed restrictions on the supply to Russia of vegetables and fruits from Burundi. From 16 January 2017, the plant production of this African country will only be allowed access into Russia when shipped directly through crossing points located in the Russian section of the external border of the Eurasian Economic Union.

According to the statement issued, the reason for this limitation is a significant increase in the delivery of alleged Burundian fruits and vegetables through the territory of Belarus and “the lack of information regarding the cultivation and production of agricultural products in Burundi.”

The statement from the Rosselkhoznadzor also noted that the decision to limit the import has been taken “in order to prevent the importation of agricultural products from countries which are subject to the embargo enforced by the Russian authorities.”

The Republic of Burundi is located in the central part of East Africa. The country has a population about 11 million people and up to 90% of the working population is engaged in agriculture. The main crops, according to the Russian embassy, are coffee (30 thousand tonnes per year), tea (10 thousand tonnes), sugar cane (more than 20 thousand tonnes), bananas, rice, cotton, cassava, corn and peanuts.

www.freshplaza.com

US President Orders Extending Sanctions against Russia over Ukraine for Another Year

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President of the United States Barack Obama decreed to extend earlier imposed sanctions against Russia over the ongoing developments in Ukraine for another year starting in March, according to Friday’s statement from the White House.

The statement said quoting the US leader that Russia’s alleged involvement in developments in neighboring Ukraine since the spring of 2014 “continue to pose an unusual and extraordinary threat to the national security and foreign policy of the United States.”

“For this reason, the national emergency declared on March 6, 2014, and the measures adopted on that date, on March 16, 2014, on March 20, 2014, and on December 19, 2014, to deal with that emergency, must continue in effect beyond March 6, 2017,” US President Obama was quoted as saying in the statement.

“Therefore,… I am continuing for 1 year the national emergency declared in Executive Order 13660 (issued on March 16, 2014),” Obama said.

A total of three US presidential executive orders were issued in regard to Russia over the developments in Ukraine, namely in March 16 and 20, 2014, as well as on December 19, 2014 on the globally-debated issue of Crimea’s reunification with Russia.

The ensuing sanctions on behalf of the United States hit a number of Russian state officials, businessmen and national companies, as well as officials from the government of former Ukrainian President Viktor Yanukovich and authorities of the Donetsk and Lugansk People’s Republics.

President-elect Donald Trump will keep President Barack Obama’s sanctions on Russia for at least the beginning of his presidency, The Wall Street Journal reports.

Trump suggested Russia could get the sanctions lifted if the country was cooperative in helping the U.S. fight terrorism, and if it was generally more amenable.

“If you get along and if Russia is really helping us, why would anybody have sanctions if somebody’s doing some really great things,” Trump declared.

Trump has previously indicated he would like to “get along with Russia.” He also told reporters, “Russia will have much greater respect for our country when I’m leading than when other people have led it”.

www.tass.com, www.dailycaller.com

WorldFood Azerbaijan 2017

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WorldFood Azerbaijan 

May 25-27, 2017

Baku Expo Center, Baku, Azerbaijan

WorldFood Azerbaijan has established itself as the Caspian Region’s leading food industry event with a history of over 20 years at its venue. Over the years of its existence, WorldFood Azerbaijan has proven itself as a reliable platform for annual meetings between experts, and demonstrations of equipment, products and services in the food industry. The exhibition provides opportunities to find new customers, strengthen existing relationships with business partners and enter new sales markets.

Exhibition profile

  • Grocery
  • Frozen foods
  • Confectionery and bakery products
  • Canned food
  • Oils, fats and sauces
  • Dairy products
  • Meat and poultry
  • Drinks
  • Fish and seafood
  • Fruits and vegetables
  • Tea and Coffee
  • Organic and Health food
  • Ingredients
  • HalalFood
  • Equipment
  • Packaging

For more information see www.worldfood.az

Interfood St. Petersburg 2017

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Interfood St. Petersburg

April 19-21, 2017

Expoforum, St. Petersburg

The biggest food and beverages trade show in St. Petersburg Exhibition of food products and drinks.

Food products:

  • Confectionary
  • Meat and poultry
  • Fish and seafood
  • Grocery
  • Fat-and-oil products
  • Canned and frozen foods
  • Milk products
  • Ice cream
  • Fruit and vegetables
  • Baby food

Alcohol and non-alcohol drinks

For more information see www.interfood-expo.ru

Agriculture in Russia: 2016 Results

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In 2016, record results were achieved in almost all sectors of agribusiness. In total, the agriculture growth is estimated to be at least 4%. Thus, the gross yield of grain increased by 15.6%, production of livestock and poultry meat – by 4.7%, the catch of aquatic biological resources – 5%. As for the production of vegetables, sugar beet production showed the maximum growth – 34%. For the first time, local apple production grew by 6%.

The amount of agricultural credits for seasonal works by Rosselkhozbank increased by nearly 44% in 2016 and amounted to more than 242 billion rubles. The total amount of agricultural credits by Rosselkhozbank amounted to more than 1.171 trillion rubles.

The total grain yield increased by 13% compare to 2015: leguminous crop grew by 28.2%, wheat  – by 17% , corn – by 7.1%, rice – by 6.5%. Soy harvest increased by 14%, that is the record high since 1991.

By the end of 2016, the meat market stabilized and grew. Meat production increased by 5.1%: pork production – by 9.7%, poultry – by 3.5%. For the first time, production beef market grew, the production growth was 0.6%.

The import of meat fell by 17.5%, including pork – by 14.3%, poultry – by 21.6%, beef – by 17.5%. Export of Russian meat grew by 55.8% (high record): for poultry and beef – by 42.9%, and it doubled for pork.

Active development of pig industry allowed Russia to become the 5th biggest pork producer in worldwide.

In 2016, Russian fishermen catch increased by 4.7% and exceeded 4.4 million MT. Catches grew in the Far East (+ 8%), the Baltic (+ 12.3%) and the Azov-Black Sea (+ 7%) basins. .

Vegetables production remained almost at the same as last year (-0.52%). Imports decreased by 25%.

In 2016, 160 hectares of modern greenhouses were built in Russia. That means 100,000 MT more of cucumbers and tomatoes.

Investments in fruit production require a minimum of 10-12 years to see some results. Nevertheless, apple production in Russia increased by 6%, as the harvest of pome fruits in general. The import of apples fell by a record 49%.

www.agroinfo.com

Fish Import Volumes to Russia Decreased by 9% in January-November 2016

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As of December 29, according to the preliminary data from the Russian Federal State Statistics Service (Rosstat), the volume of fish production in Russia rose by 2.6% in January-November 2016 compared to the same period of 2015, and reached 3.613 million MT.

Export volumes of fish and fish products from Russia amounted to 1.76 million MT in January-November 2016, which is 7% more than during the same period of 2015. According to the preliminary data of Federal Customs Service of Russia, pollock has the biggest share of export: its export volumes increased by 3.4% up to 730,600 MT in January-November. At the same time, the exports of frozen herring decreased by 21.2% to 86,200 MT, while the total catch of all kinds of herring (Pacific, Atlantic, Baltic) grew by 10% up to 401,200 MT in January-November.

Fish fillet exports from Russia grew by 15.2% up to 105,900 MT, exports of finished and canned products also rose by 18.2% up to 14,300 MT.

According to Rosstat preliminary data, in January-November 2016, the volume of imports of fish products decreased by 8.7% compared to the same period in 2015 and amounted to 455,900 MT. The volume of frozen capelin imports dropped by 66.6% to 9,700 MT,  imports of frozen herring – by 37% to 29,800 MT, imports of frozen salmon – by 22% to 41,800 MT.

At the same time, the imports of frozen trout increased by 27.4% up to 9,300 MT, and imports of frozen mackerel – by 24.1% up to 68,500 MT.

www.fish.gov.ru

Vladimir Putin: “4% Increase in Production for Russian Agriculture in 2016”

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During his annual end-of-year press conference, President Putin said the Russian agricultural production increased by at least four per cent in 2016. “Agriculture is experiencing a significant increase. Last year, it was an increase of 2.6 per cent, and this year it appears as if it will be even more than the predicted 3.2 per cent, it will be at least four per cent,” according to Putin. Putin said this trend should be continued in coming years.

Remembering the high inflation in Russia in 2016, Putin said this was “partially to blame on the so-called import substitutes in agriculture.” “Some disproportions arise on the market. Not everyone was able to replace import by own production,” he said. “This year, agriculture will experience a good dynamic. That is why inflation will look completely different,” he continued.

The Russian wheat harvest will amount to more than 119 million tonnes for 2016, according to Putin. National support for the agricultural sector will reach 216 billion rouble in 2017 (compared 215 billion rouble in 2016), Putin said.

Putin said the harvest had never before been this high in the recent history of Russia. “During the Soviet days, we had exemplary harvests in the 1970s, slightly higher than now, even. But we know that at that moment, unfortunately, and even with such large harvests, there still was not enough production of food for people and animals.”

“Today’s performances and the changes in the agricultural sector, show that the result we have achieved is exceptionally unique, and allows for very good possibilities for the further development of Russian agriculture,” Putin continued. He also said that higher sales in the agricultural sector would stimulate the demand for agricultural machines. “I am certain that if the farmers’ incomes increase, demand [for machines] will increase. That will also support the construction of agricultural machines,” Putin concluded.

www.freshplaza.com

Ruble Keeps Strengthening in December

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November 31, the Organization of the Petroleum Exporting Countries (OPEC) agreed to cut their oil production by 1.2 million barrels per day in order to raise global prices. Global oil prices increased by 15% after the decision had been made, with Brent crude rising from $46 per barrel up to $53.77 per barrel next day, and they kept growing in December – 56.94 (Dec 29). Now the analysts predict the oil prices to be at the level of $60 in 2017. Just to remember – in January, 2016, Brent crude price was $32.1 per barrel. As ruble has been strongly correlated with oil prices, it strengthened in December and gained 7% against USD and 8,5% against euro. In 2016, it gained against USD more than 27% – from 83.6 rubles per dollar January 22, 2016 to the official rate of the Russian Central Bank on December 29, 2016 60.67 rubles per dollar.

According to the Russian Ministry of Economic Development, in 2016 the consumer price inflation is estimated to be 5.6%, which is slightly lower than it was officially forecast. In annual terms, the inflation rate is declining steadily since July of this year – from 7.5% in June to 5.8% in November. Russia’s GDP fell by 0.6% during 11 months of 2016. Just to compare: in 2015, GDP fell by 3.7%, and inflation was 12.9%.

According to the Ministry of Economic Development, the real disposable household income, i.e. the amount that remains in the hands of the citizens after the payment of all required payments, will decrease more than expected. It was forecast to be 5.6% decrease, now it is estimated to be 5.8% fall.

www.rbc.ru, www.interfax.ru, www.rg.ru

Almost 9,000 MT of Products Destroyed in Russian Since August 6, 2015

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Since August 6, 2015, in Russia 8,872 MT of products imported from countries, which were affected by the Russian Food Ban, have been destroyed, according to Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor). 8,546 MT of products of plant origin and 326 MT of animal products were destroyed in total for this period.

August 6, 2014, President Vladimir Putin signed a decree as a response to the Western sanctions and to support domestic producers. June 24, 2015, Putin extended the food embargo until August 5, 2016, and August 12, 2016, the government extended it until the end of 2017.

According to the decision of the Russian government, imports of beef, chicken, pork, dairy products, live, chilled and frozen fish and shellfish, nuts, fruits and vegetables from the US, EU, Australia, Canada and Norway are banned. Dietary supplements, meals for sports and medical purposes as well as baby food are not included in the list of banned products. Fry of salmon, trout, oysters and mussels, as well as, seed potatoes, seed onions, sugar beets and peas for planting were excluded from the list of banned products.

www.vedomosti.ru