Market News

Russia to develop organic sertification standards

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In the past few years, city-dwelling Russians have developed a strong interest in healthier and organic food, according to Emily Balsamo from the Moscow Office of Bord Bia – Irish Food Board. However, presently there is no certification for organic products in Russia. Many products carry the labels “organic” or “bio” without certification.

In 2012, several producers of such products wrote an open letter to the Russian Ministry of Agriculture demanding a certification process.

The Ministry of Agriculture responded with a draft law, “On the production of organic agricultural products and amendments to legislative acts of the Russian Federation,” dated 26 November 2012.

The draft law designates that Russian organic standards will be consistent with EU Organic regulations and the National Organic Program in the United States. However, there is no regulatory body in Russia which is prepared to certify organic products at this time.

Analysts believe that the responsibility of certification will be delegated to the Russian Service for Veterinary and Phytosanitary Surveillance, or that a new non-governmental regulatory authority will be founded. The draft law designates that in order for a product to be labeled “organic” or “bio,” the certification process will need to be passed. Russian Government Agricultural experts are currently studying American, European and Japanese certification techniques.

Harmonisation with international and national standards is one of the main goals in producing organic and bio food legislation. The impetus for this move is widely considered to be Russia’s recent accession to the WTO.
Russia producers are interested in taking advantage of the facilitated trade environment and have plans to export Russian-made organic products to the EU.

However, certification will also allow for facilitated import of organic and bio products to Russia from the EU, as the draft legislation mandates that any product labeled organic under EU certification will maintain certification in Russia.

The law is expected to come into full effect in 2015

Source: www.thefishsite.com

Okey Group opens 4th hypermarket in Moscow region

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Okey Group S.A., one of the leading Russian food retailers, announces the opening of its 4th hypermarket in Moscow region.

The new hypermarket is located outside of the city boundaries in a new commercial center. Total space of the hypermarket is 10,600 sq.m.. The trading area of the hypermarket is 6,900 sq.m.. The store offers customers more than 34,000 SKUs, with non-food items accounting for approximately 65% of the total. The store has 370 employees.

This is the Company’s 53rd hypermarket, and 84th store overall, including supermarkets, with aggregate trading space exceeding 434,000 sq.m.

Okey is one of the largest retail chains in Russia. Its primary retail format is the modern Western European hypermarket under the Okey brand, complemented by “Okey – Express” supermarkets.

The Company opened its first hypermarket in St. Petersburg in 2002 and has demonstrated continuous growth ever since. As at 30 June 2012, Okey operated 75 stores in 18 cities across Russia: 45 hypermarkets with an aggregate selling space of approximately 329,000 square meters and 30 supermarkets with an aggregate selling space of approximately 39,000 square meters. As of 30 June 2012 Okey employed more than 20,000 people.

In accordance with the unaudited consolidated financial statements for 1H 2012, Okey’s revenue was RUR 54,122 million, like-for-like revenue growth rate was 7.9% and its EBITDA margin was 6.8%.

Source: www.okmarket.ru

 

Metro Cash & Carry earns €4.12bn in Russia in 2012

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Metro Cash & Carry, a German grocery retailer (and part of the Metro Group), reported sales in Russia of €4.12bn in fiscal 2012, against €3.42bn in 2011 (a 20.4% y-o-y increase).

During the last year the company opened six hypermarkets in the country, and by the end of 2012 Metro Cash & Carry operated 68 outlets.

What is more, another grocery brand in the group, Real, increased its sales in Russia from €722m in 2011 to €859m last year (19% y-o-y growth). However, Real chain is to be acquired by the French Auchan, and the deal is to be completed this year.

Source: www.russiaretail.com

Azbuka Vkusa to develop small shopping malls in Moscow and Leningrad Provinces

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Azbuka Vkusa, a premium class grocery retailer, is planning to build 15 shopping centres in the Moscow and Leningrad Provinces within the next five years. Each will cover up to 4,000 m2 and will house an Azbuka Vkusa supermarket on about 2,000 m2. The rest of the areas will be let to rent to fast food restaurants, laundries and other small businesses. The project development was prompted by a lack of suitable premises and the total amount invested is estimated to be $150m.
Today, Azbuka Vkusa has 53 supermarkets in and around Moscow and St. Petersburg. As Retail Update Russia reported on a previous occasion, the company recently announced plans to expand on the Ukrainian market.

Source: www.russiaretail.com

Magnit revenues rises significantly

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Magnit’s full-year revenue and EBITDA rose significantly, which helped it book a more than 100% rise in net income.

Revenue in rubles increased by 34% YoY from 335,699.95 million RUR in 2011 to 448,661.13 million RUR in 2012. The top line growth was due to an increase in selling space as well as to a 5.26% increase of like-for-like sales (excl. VAT).

Revenue growth in dollar terms amounted to 26%: from US$ 11.4 million to US$ 14.4 million.

Gross margin grew from 24.33% in 2011 to 26.53% in 2012. Gross profit in rubles increased by 45.78% from 81,663.45 million RUR (US$ 2,778.86 million) to 119,051.79 million RUR (US$ 3,828.89 million).

EBITDA increased by 71.64% from 27,604.14 million RUR (US$ 939.32 million) in 2011 to 47,380.48 million RUR (US$ 1,523.83 million) in 2012. EBITDA margin in 2012 amounted to 10.56%. Net debt / EBITDA ration (in ruble terms) for 2012 amounted to 1.07.

2012 net income increased by 104.14% and amounted to 25,117.17 million RUR (US$ 807.81 million) vs. 12,303.84 million RUR (US$ 418.68 million) in 2011.

Source: www.freshplaza.com

Lenta hypermarket in Krasnoyarsk

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By the end of 2013 a new hypermarket Lenta will be opened in Krasnoyarsk.

The total area of the hypermarket will be about 12,000 square meters. Number of items is 20,000 SKU. It is noted that products of local manufacturers will be especially placed there.

Today, Lenta is one of the largest Russian retailers. It was founded in 1993 in St. Petersburg, and now, there are more than 50 hypermarkets in different regions of the country .

Source: www.megamagnat.ru

Pakistan: Export focus should be on Russia

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Chief Executive Officer of Harvest Tradings, Ahmad Jawad has said that Russia can be the biggest fruit market for Pakistani exporters.

Jawad said that the size of the Russian fruit market is around $5.77 billion of which imports account for 80 percent. However, this huge market has remained unexplored although there is a big potential for the export of Pakistan’s horticulture products, especially for fruits.

Unfortunately Pakistani exporters of horticulture products are finding it difficult to penetrate the Russian market due to the unavailability of banking channels, Jawad observed.

He said Pakistan and Russia might jointly look into the possibilities of organizing trade delegations and exhibitions in each other’s countries as part of a new marketing strategy.

Jawad emphasised that the government should draw a workable strategy to increase exports from the fresh produce industry.

“Our focus should be on Russian and CIS markets with regard to fruits and vegetables which are ready to absorb as much as we could export,” he said.

Source: www.freshplaza.com

JFC Group fails to oust bankruptcy administrator

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The JFC Group has failed in its efforts to oust its bankruptcy administrator in the St. Petersburg Commercial Court.

JFC Group is currently involved in a court supervised bankruptcy procedure.

The creditor, Raiffeisen Bank, claimed that Dmitry Bubnov, the temporary administrator of the fruit company, has twice failed to submit the regular performance reports required by the court as well as his analysis of the debtor’s fiscal status.

However, according to the court, the bank has not presented any evidence showing that Bubnov has been negligent, as claimed by the bank. Raiffeisen claimed that Bubnov’s inaction has entailed, or could have entailed, losses for the debtor and the creditors.

The group’s major creditors include the Bank of Moscow, Sberbank, Promsvyazbank, Uralsib Bank, and Raiffeisen Bank.

Source: www.freshplaza.com

Retailer “Sem’ja” launches on-line sale

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Elena Giliazova, director of retail chain Sem’ja said on the new plans for the retailer this month:

“We set the task of finding those features that make network different from all others. This is the on-line sale, although at first we will leave the possibility to order products over the phone. The products will be packed and prepared in the nearest to you Sem’ja store. Of course, it will be possible to deliver it to home.
One of the main feature will be farm products, including vegetable products. 

Source: www.fruitnews.ru