Major Brands Persist on Russian Market: Kellogg's cereals, Coca-Cola beverages, and Brewdog beer found to be still available amidst economic restrictions.
In a Azbuka Vkusa supermarket in the heart of Moscow, I'm surrounded by a medley of Western goods - Kellogg's cornflakes, Bonne Maman jam, Kent Crisps, and Brewdog beer. It's three years past when Russia was meant to be in isolation, yet the shelves are brimming with items from the West. How's this possible?
Legalized parallel imports have made it happen. These are merchandise that have bypassed the original brand owners' permission, entering Russia through third countries. Russia legalized parallel imports post its invasion of Ukraine to evade sanctions and shield consumers from the transition of foreign brands deserting the market.
Even brands like Coca-Cola, which stopped selling to Russia and ceased operations here in 2022, can still be found on these shelves. The drinks come from various countries like France, Poland, Iraq, and the UK. Each can bears a humble plea, "Please recycle me." The company has declined comments when asked about the situation.
This isn't about sanctions-busting, since food and drink are usually exempted from restrictions imposed by Britain and the EU. However, it demonstrates how trade restrictions, self-imposed in this case, can be circumvented. The practice isn't exclusive to food and beverages. Luxury cars, too, are finding their way into Russia, bypassing the sanctions regime designed to keep them out.
At Frank Auto, a fancy car showroom in northwest Moscow, you'll find the latest Porsche Cayenne Coupe, Mercedes EQE, and BMW X5. All these cars are under two years old, younger than the sanctions regime intended to keep them out. Irina Frank, the dealership owner, frankly admits, "Germany officially does not know that we import cars for clients from Russia."
The cars are imported to order due to cost and uncertainty. Irina has even sold a Ferrari Purosangue to a customer who paid 130 million roubles (1.43 million euros) - a whopping 30% more than the pre-sanction price. She even boasts about selling Range Rovers from Britain, shrugging, "Russia, you know, is a special country. Our people love everything expensive, cool, and highly configured."
We've reported extensively on how British and European cars continue to make their way to Russia despite sanctions. This is the first time we've spoken to some of the importers.
In a car park near Moscow's Belarussky train station, we meet Ararat Mardoyan, who runs a car brokerage firm called Autodegustator. His black Volkswagen took six months to arrive from Germany, traveling through Belgium, Georgia, Armenia, and Iran. "You're not doing anything wrong," he insists when I ask if he's helping Russia sidestep sanctions. He cites the Eurasian Economic Union as his justification, comparing it to the European Union.
However, some might question the morality of such practices. Mardoyan dismisses such thoughts, arguing, "It's business. People have to work and survive." He stopped importing European cars last year due to increased risks and declining profits. Yet, he believes the practice will never cease. "People who want to drive Ferrari," he says, "they always have the money, and where there's demand, there will always be supply."
Sanctions have not deterred the import of luxury cars into Russia, as demonstrated by the presence of a Porsche Cayenne Coupe, Mercedes EQE, and BMW X5 at Frank Auto, despite their sanctions-intended absence. This is achieved through importing cars to order due to cost and uncertainty, as admitted by dealership owner Irina Frank.
Despite food and drinks being typically exempt from sanctions, legalized parallel imports have allowed Western goods such as Coca-Cola to find their way onto Russian shelves, even after the company ceased operations in Russia. These items often come from third countries, as one can observe from the "Please recycle me" label on each can.
