Russia

Belgorod Oblast to produce 1 mln tons of apples a year

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The Russian region of Belgorod is expected to produce one million tonnes of apples per year; a third of the Russian demand for this fruit. The head of Belgorod Oblast’s Department of Agriculture, Stanislav Aleynik, pointed out that last year, according to the Federal Customs Service, Russia imported $ 6.2 billion worth of fruits and berries, 40% of which could have been grown in Russia.

“After joining the WTO in 2012, customs tariffs have significantly fallen, so the volume of apple imports increased,” said Stanislav Aleynik. “Thus, Russian buyers are investing more than 500 million Euro in the development of foreign economies.”

According to officials, this is due to lack of domestic product in the market, but the situation can change. In the Belgorod region, the gross apple harvest last year reached 47,000 tonnes. More than half of the large companies have expanded and the average yield has improved with the growth of intensive orchards, where it is possible to grow 40 tonnes of apples per hectare.

Stanislav Aleynik noted that, in the future, depending on the number of trees planted per hectare, there will be three planting schemes, each needing a different investment and generating different levels of revenue. With the maximum density (2.5 thousand apple trees per hectare), the cost would be of 2.9 million Roubles, but within three years, when the trees begin to provide a stable yield, the net profit would be of 785 thousand Roubles per hectare.

However, the head of the Russian Association of Growers and CEO of a large Belgorod company, Victor Gorodov, noted that the main issue would be where to get so much quality planting material. According to Stanislav Aleynik, to achieve Belgorod’s goals the region would need an additional 27 million seedlings, and a lot of money.

However, Victor also believes that agriculture in Russia is easier than ever, as the technology has already been implemented. Besides, if we talk about the Belgorod region, the unique soils allow local fruit producers to compete with Western growers.

www.fruit-inform.com

Magnit fined $581 for endangering consumer health

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Administrative sanctions have been brought against the Magnit supermarket chain, which is owned by Tander, for numerous violations threatening the health of consumers. Charges brought against the company for violations of sanitary regulations were found to be justified by the Arbitration Court of St. Petersburg and the Leningrad Region, Fonatank.ru reported on June 14.

Supermarkets in the Magnit chain were inspected in Autumn 2013 according to a schedule agreed upon by prosecutors. Federal Service for Supervision of Consumer Rights Protection and Human Well-Being inspectors in St. Petersburg found evidence that the chain was selling substandard product, including rotten cucumbers and fish. An examination of cranberries sold by Magnit revealed the presence of cesium-137 in levels of up to 320 becquerels per kilogram.

The company denies the charges. The director of the St. Petersburg branch of Tander Vladimir Dubinin argued that most of the health department violations had not been documented. He rejected the findings of the supervisory authority on the sale of substandard product. “The official documents do not conform to current legislation,” Dubinin told Fontanka.ru.

www.freshplaza.com

Azbuka Vkusa adds a new format

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The retailer Azbuka Vkusa announced launching new format of supermarkets – AV Market. As it has been known from Vedomosti newspaper Andrey Tkemaladze is going to be a director of the new chain of supermarkets.

According to the top manager, 5 hypermarkets, which Azbuka Vkusa gets as result of a deal with Spar, are going to be rebranded by the end of the year. Complimentary to rebranded Spar hypermarkets this year another 5 new hypermarkets will be opened: 3 – in Moscow, 2 – in Moscow region. The retailer is planning to open not less than 5 new AV Market hypermarkets per year.

When developing this new format supermarkets Azbuka Vkusa was deeply learning a background of USA supermarket networks such as Wegmans, Whole Foods, Trader Joe’s.

Target market of AV Market is going to be wider than usual Azbuka Vkusa has. The retailer wants to carry out a new format – a market inside a store, where customers can bargain and get a discount depending on goods’ amount.
An average bill will be around 1000 Rubles and that is 1.5 lower than in usual Azbuka Vkusa supermarkets, but higher than in other super- and hypermarkets.

A product assortment is going to consist of 15,000-20,000 names. Groceries will take 10-15% of the whole amount of product assortment. A share of fresh products will take 50% of whole assortment. It is planned to create few in-store cafes, but it will depend on store square.

AV Market is going to be an anchor renter in shopping malls: minimal selling area of AV Market will take 2000 square meters, maximal – up to 10,000 square meters.

www.retailer.ru

Magnit and Lenta conquering Siberia

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Magnit and Lenta, along with a local chain, Holiday Klassik, will be the key retailers in the region in the future. Their market penetration in the region will grow faster than those like X5 and Auchan, while product availability on their shelves may become better thanks to the investment into distribution centres.

Russia’s leading market player Magnit, which has operated a distribution centre in Omsk since 2012, recently launched a 19,000 square metre leased distribution centre in Novosibirsk. Investment in logistics facilities clearly shows retailers’ focus on the store expansion in Siberia. Magnit opened its first store in Siberia in 2010 and expand the network to 120 by the end of 2013.

St Peterburg based Lenta opened its first hypermarket in Siberia in 2006 and since then it has opened 17 large outlets. In addition to that it opened a 37,500 sq m distribution centre in Novosibirsk last year. The retailer recently opened its first hypermarket in Krasnoyarsk and it is building its sixth store in Novosibirsk while a new store is planned for Novokuznetsk.

Auchan operates two Auchan hypermarkets and two Auchan City compact hypermarkets, X5 runs 25 small stores and one hypermarket while O’Key has five hypermarkets and one supermarket. In contrast to them Dixy Group and Rewe Group have not penetrated the region yet.

www.freshplaza.com

Boycott harmful to Russia and EU

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Tensions between the EU and Russia are increasing. Russian interference in the political turmoil in Ukraine and the alleged presence of Russian troops in the Crimea, led to the EU imposing sanctions against Russia. At the time this article went to press, there was as yet no official reaction from Russia. However, the EU already announced further sanctions. And although political responses are difficult to predict, the tensions also affect the European fruit and vegetable sector.

“We have to wait and see what impact this will have, and whether counter restrictions, are to be expected,” says Inge Ribbens of Frugi Venta. “Until now, fruits and vegetables are still exported. Potatoes have an import ban, but the sector isn’t affected yet.” Arjan Zoutewelle of the same import and export company, sees tensions rise. “I noticed that the sector, say forty percent of it, is nervous, and that there is uncertainty about the devaluation of the ruble. In the long run, a low ruble is not good for business. In Russia, imported products are therefore more expensive.”

If there is a threat to domestic crops or human health, boundaries are often closed, but there may also be a political agenda behind a boycott. In February, Romain Cools of Belgapom suspected a political agenda behind the potato import ban on Russia. He then said: “Russia is not only closed to the potato and the seed potato sector, but now European pork is no longer allowed in. The Russians found an alternative with American pork, which increasingly seems to point to a political motive.”

Exports to Russia mainly consists of products such as machinery, chemicals and processed products. About eight percent of exports consist of food and live animals. Fresh produce makes up the biggest part. In general, a boycott of European fruit and vegetables to Russia may be more problematic than in Europe, expects Arjan Zoutewelle. The world can’t always meet Russian demand. It also depends on the countries and products that fall under a boycott. More worrying is when the Russian border is closed and there is a good harvest in Europe. “If there is a boycott, we better not have over-production in Europe, because then we really need Russia to buy our production peaks.”

www.freshplaza.com

“Green” retailers

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Greenpeace made an annual rating called “Green supermarket” where Russian retailers are rated by the level of contribution in recycling problem solvation. First places were taken by “Auchan” and “Dixy”.

Experts were comparing and estimating 10 biggest supermarket networks – “Auchan”, “Dixy”, Х5 Retail Group, “Lenta”, “O’kay”, “Magnit”, “Holiday classic”, “Maria Ra”, “Sedmoy Continent” , and “Monyetka”. These retailers were estimated by 20 criteria such as receiving packaging for further recycling, reduction of packaging, a possibility of using own packaging for catchweight goods, a presence of goods with ecofriendly packaging.

“Auchan” took the first place due to the opening recycling centers in St. Petersburg and the possibility of buying catchweight goods. “Dixy” was also pointed out because of the presence of recycling centers in Moscow and the sale of original non-disposable bags.

“O’kay”, “Sedmoy Continent”, and “Monyetka” are turned to be at the end of the rating list.

“Unfortunately, even leaders of our list are far from being “green” retailers. However, most of them are changing their policy: refusing from free plastic bags, letting do weighting of fruit and vegetables without packaging, and even opening recycling centers. Directors of stores understand that such actions are attracting attention of new clients and making their stores more competitive on the market,” – Rashid Alimov, a coordinator of “Greenpeace Toxic Program”, said.

www.retailer.ru

Russia: wide apple price range in Moscow

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The apple price range was rather wide in Moscow on May 23: 0.61-1.37 euro/kg, depending on variety and country of origin.

Polish apples traditionally were the least expensive. Wholesale companies offered those apples at 0.65-0.87 euro/kg with the demand for them being moderate.

Apples of Spanish, French, Chilean and South African origin were offered as a premium category at 1.17-1.37 euro/kg.

It should be noted that prices of imported apples were significantly higher last year: 0.81-1.77 euro/kg. A year-on-year decrease in apple prices is connected with rather low demand for apples in the global market now.

www.fruit-inform.com

Russia doubles strawberry imports in March

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This year’s latest figures show that Russia has imported a large quantity of strawberries during the month of March, which have been devoted to the local market. This volume doubles the amount imported in February 2014.

Over 5,000 tonnes of strawberries were shipped to the Russian market in March, which more than doubles the volume purchased in February, which was of 2,000 tonnes. Russia’s main strawberry supplier was the European Union, which accounted for 83% of the shipments. Egypt stood second, followed in third place by China.

www.freshplaza.com

Pesticide nitrates are detected in 600 tons of fruits and vegetables in Russia

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According to the latest data, Russian toxic substance control service has examined more than 600 tons of fruits and vegetables imported to the domestic market. Due to inspection results, violations of standards were detected in 27 lots of fruits including 120 tons of tomatoes, 120 tons of marrows and 220 tons of apples. The acceptable nitrates level was several times exceeded. Most of low quality products were delivered from Turkey and Poland.

www.freshplaza.com

Russian growers do not plan to raise apple prices until end of season

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The majority of Russian apple farms have already reported of the finish of the season with the rest offering remaining volumes.

In view of that, growers do not plan to revise apple prices to sell their stocks as soon as possible as the quality of apples is sharply decreasing now.

For the present, apple prices in Russia still vary between RUB 22-27/kg (EUR 0.41-0.51/kg), depending on variety. Price levels in the same period of the previous season were similar to current ones.

www.fruit-inform.com