Russia’s monthly retail sales averaged about $50 billion, and overall retail sales in 2010 were $542.4 billion, which equals 17.8 percent growth compared to 2009. Food retailers contributed 48.6 percent to total retail market turnover last year.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
Required Report - public distribution
GAIN Report Number: RSATO1110
Russian Retail Market Continues Expansion
Deanna Ayala, ATO Director
Olga Kolchevnikova, Marketing Specialist
While the Russian economy suffered a setback in 2009 due to slumping oil export sales and the effects
of the global economic crisis, the retail sector remains a growth leader. Positive growth in Russian
grocery retailers helped to ring in good retail value sales in 2010. Russia?s monthly retail sales averaged
about $50 billion, and overall retail sales in 2010 were $542.4 billion, which equals 17.8 percent growth
compared to 2009. Food retailers contributed 48.6 percent to total retail market turnover last year.
Grocery retailers increased the value of in-store sales in 2010 to reach 65 percent. The leading grocers
reported the active development of low-end supermarkets. Internet retailing growth rates remained
high, exceeding the growth rates of offline retailing. Foreign suppliers continue to be competitive in
Russia. Market opportunities for U.S. products include red meats, poultry, fish and seafood products, tree
nuts, fresh and dried fruits, food preparations and pet foods.
Among the consumer-oriented sectors in Russia, retail is of primary importance. Starting from 1998,
Russia has experienced a consumer boom, largely the result of nearly nine years of economic prosperity,
fueled by high oil and natural gas prices. As a result, retail sales value grew at a pace of 20 to 30
percent annually. With this, the large newly-affluent urban population in Russia?s cities provided a big
boost to the development of the retail market in the country.
In 2009, personal consumption declined as a result of the economic downturn of 2008 and the overall
Russian retail market lost 5.5 percent. Consumers shifted to lower-priced essentials and delayed or
cancelled planned purchases of non-food or premium products. However, in 2010 Russia began the
process of recovery. The Russian government stepped in at the right time to help the retail sector.
Russia?s ten largest food retailers received loans from the government to the tune of $1.5 billion to tide
them over the recession.
Helped by the improving oil prices and government efforts, the Russian economy gradually recovered
as consumers began spending again. Real GDP rebounded in 2010 to grow by 4.3 percent, following the
major decline in 2009. According to Rosstat, in 2010 the real disposable income of the Russian
population increased by 10.2 percent, compared to the corresponding period in 2009. Despite this
improvement, the average monthly salary remained low at US$688 (RUB20,438). The rate of
unemployment in Russia decreased by one percent in 2010 to reach 7.5, according to Rosstat.
Monthly retail sales in Russia average about $50 billion, while the industry recorded revenues of $542.4
billion in 2010, which is 17.8 percent growth compared to 2009. Food retailers contributed to 48.6
percent of the total retail market turnover last year. According to Euromonitor International, grocery
retailers increased their share of store-based retail value sales in 2010 to reach 65 percent. The leading
grocers reported the active development of low-end supermarkets. Internet retailing growth rates
remained solid during 2010, exceeding the growth rates of offline retailing while still remaining a
relatively small percent of the overall market. Internet sales increased 30 percent over last year and they
are expected to double in 2011, according to Euromonitor?s forecast.
Figure 1. Russia?s Retail Turnover, $ U.S. billion
Source: Federal State Statistics Service (Rosstat)
Food price inflation in Russia continues to be a sensitive issue. Prices for food products including
potatoes and buckwheat jumped in 2010 after unseasonably hot weather destroyed harvests across the
country. In particular, fruit and vegetables prices went up by 45.6 percent, registering the highest growth
since 1999, and prices for cereals and legumes rose by 58.8 percent for the full year. In general, food
prices rose by 12.9 percent in 2010 as against 6.1 percent in previous year. With grain crops forecast to
rebound this year, price pressure should be somewhat moderated.
One of the consequences of the unstable economic situation is the change in consumption patterns in
Russia. Consumers have become more cautious and pragmatic in their product choices. Thus, Russian
consumers have been looking for best quality-to-price ratios when shopping. Grocery retailers have
been reorganizing their stores as economy formats in order to fit with the consumers? reorientation
towards the lowest available prices.
Section I. Market Summary
Given the limited number of multinational players on the domestic market, Russian food retail continues
to be led by large domestic retailers with annual turnover exceeding $2 billion. Russian retail giants
such as the X5 Retail Group, Magnit, Seventh Continent and Dixie chains are still among the top
Russian retail players. That said, in addition to domestic companies, the French Auchan Group, German
Metro AG and others have earned significant market shares during last decade. Nationwide, retail chains
occupy about 18 percent of the food retail market, but with higher concentrations in major urban centers
(about 21 percent in Moscow and 48.3 percent in St. Petersburg, according to Rosstat).
Traditional retail formats such as kiosks, street markets and small grocery stores keep declining in
upper-tier urban Russia with open-air markets reducing in number. Food street markets decreased in
number by 5 percent in 2010, amounting to 12.5 percent of retail sales in Russia in 2010, according to
Rosstat. Traditional retail has the weakest position in Moscow and Saint Petersburg.
The retail market in Russia varies significantly among the Federal Districts both in terms of value and
the nature of its development. The variations result from the number of inhabitants, population density,
level of urbanization, as well as average monthly income and expenditures, existing competition and
other regional characteristics.
According to PMR, the Central Federal District (which contains Moscow) is the smallest yet the most
populous region of Russia and remains the largest retail market in the country, accounting for 34.1
percent of country sales in 2010. The majority of the largest retailers in Russia originate from Moscow,
which gives the Central Federal District the special status of the region accommodating the leading
domestic operators as well as foreign retailers establishing their presence in Russia. The Southern and
Volga Federal Districts contributed to the Russian growth evenly. The Far East had the lowest share of
retail sales among the Federal Districts in Russia. At the same time, the Far East is the largest District in
terms of area with the population that comprises only 6 percent of Russians.
Figure 2. Retail Turnover in Russia by Federal District in 2010*, %
Source: PMR Publications
*The North Caucasus Federal District was formed in 2010, as separate from the Southern Federal
According to Euromonitor, the share of informal retailing in Russia is 10 to 25 percent of total retail
sales, depending on the region. For example, in the regions located near Russia?s borders, the level of
informal retailing may even reach 30 to 35 percent of total retail sales. Informal retailing is due to
numerous unofficial entrepreneurs who cross the border and sell goods in Russia at prices lower than in
standard retail outlets. In rural areas the level of informal retailing is much higher than in cities.
Currently supermarkets, hypermarkets, discounters, and specialized non-grocery retailers do not see
strong threats from informal retailers. Helping the development of modern retailing is the fact that local
governments are attempting to stamp out informal retailing.
Strong competition and high rents in large cities limit the profitability of retailers and forces them to
seek further growth opportunities in Russia?s regions. During 2010, many regional companies
strengthened, and they are ready to compete strongly with federal chains in the capital.
Existing Retail Sales Outlet Formats in Russia
The following retail sales outlet formats exist in the Russian market:
Hypermarket. A store with retail space of more than 2,500 sq. meters, where not less than 35
percent of the space is used for sales of non-food products. As a rule, a hypermarket is located
on the outskirts of large cities, or is the anchor store of a large urban shopping mall (e.g.,
Auchan, O'Key, Lenta.).
Hypermarkets target car-owning households of all income levels who seek higher-quality products,
more services and wider assortments. So-called ?Family shopping?, when many products are purchased
on a weekly shop, has become very popular in Russia. In 2010, food products accounted for about 83
percent of retail value sales in hypermarkets, according to Euromonitor.
In 2008-2009 the sales turnover, selling areas and the number of hypermarket outlets declined
significantly compared with previous years. The Grossmart and Ramstore chains withdrew from
hypermarkets in Russia in 2008, followed by Carrefour in 2009 (for more information please see Gain
However, in 2010 hypermarkets regained ground and their sales grew by 26 percent compared to 2009
to reach $18 billion. This sector remains concentrated in the hands of national and multinational
operators. Ten major hypermarket chains including Auchan, Lenta, O?Key and Karusel controlled over
91 percent of sales in 2010. The major share belongs to the French group Auchan (34.1 percent)
followed by O?Key company (13.9 percent). Karusel which was acquired and consolidated into the X5
Group, held 12.4 percent of total hypermarket segment sales in 2010.
Figure 3. Russian Retail Market Share By Company in 2010. Hypermarkets.
Source: Euromonitor from trade sources/national statistics
Supermarket. A retail outlet with sales space from 400 to 2,500 sq. meters, where at least 70
percent of the product line is food products and everyday goods (e.g., "Perekriostok", "Sedmoi
The main consumer targets for low cost supermarkets like Pyaterochka and Monetka include low-
income households, the elderly people and students. As a rule, these consumers do not own a car, and
they often prefer to shop in the outlets closest to home. Most supermarket operators benefit from
convenient locations in residential areas.
Supermarkets compete with hypermarkets, convenience stores and independent small grocers as they
focus on the same consumer groups. Almost all retail operators offer a range of ready-to-eat food and
chilled ready-to-cook products. The share of food sales versus non-food sales in supermarkets increased
in 2010 to reach 91 percent. The number of supermarket outlets increased by 5 percent in 2010,
following a 7 percent decline in 2009. New stores have been opening up while inefficient ones are being
In 2010 supermarkets accounted for the highest retail sales within grocery retailing. X5 Retail Group
remained the leading player through its Pyaterochka and Perekriostok chains. Overall, the company
accounted for a 17 percent share of retail sales in supermarkets in 2010.
Figure 4. Russian Retail Market Share By Company in 2010. Supermarkets.
Source: Euromonitor from trade sources/national statistics
Discounter. A retail outlet with sales space from 300 to 1000 sq. meters, selling goods with a
minimum margin from 5 to 7 percent, and whose assortment consists of 500 ? 2,000 items with
minimum of 50 percent share occupied by private labels.
According to Euromonitor International and other industry experts, there is no clear discounter format in
Russia according to Western standards. As a rule, local stores like Pyatyorochka, Monetka and Dixie
work as low-end supermarkets with sales space from 350 to 900 sq. meters, product ranges from 3,500
to 5,200 items, and with mark-ups accounting for 13 ? 23 percent, while the share of private label items
occupies from 10 to 15 percent. At the same time, the common Western meaning of a Discounter is a
store with sales space from 300 to 1000 sq. meters, selling goods with a minimum margin from 5 to 7
percent, and whose assortment consists of 500 ? 2,000 items with minimum of 50 percent share
occupied by private labels. Sometimes the share of private labels in Europe may reach 80 percent.
Examples of discounter format in Europe are German chains Aldi and Lidl, where the share of private
labels accounts up to 95 percent.
Cash & Carry. A retail outlet of roughly 8,000 sq. meters, working under the principles of
small wholesaling (e.g., "Selgros", "Metro Cash & Carry").
Cash and carry, also known as self-service wholesale store retailing, is a wholesale format aimed
specifically at trade customers, generally large-scale big-box stores providing a wide range of goods,
primarily grocery but including some non-grocery items. Customers must normally prove they represent
a registered business in order to be allowed to shop at such stores.
In 2010 three companies operated cash and carry outlets in Russia: German Metro Group, Rewe Group
and locally-based Victoria Group (Victoria Group operates only one cash and carry outlet, Kesh). Total
cash and carry sales increased by 6.6 percent in 2010 and accounted $4.2 million.
International operator Metro Group is by far the leading cash and carry outlet in Russia. In 2010, the
company accounted for 94 percent of total cash and carry sales in the country. The company opened five
more outlets in 2010 and it plans to reach a total of 65 stores by the end of 2011. Selgros operates 4
stores in Russia and expects to open up to 50 cash and carry outlets over the next 20 years.
Russian consumers often consider cash and carry and hypermarkets to be the same format. Cash and
carries and hypermarkets offer the widest product assortment and have the largest sales areas compared
with other retail formats. Both hypermarkets and cash and carry outlets focus on large family packs and
operate on a self-service basis. Both also provide additional services such as in-store bakeries or ready
meals, along with plentiful parking.
Figure 5. Russian Retail Market Share By Company in 2010. Cash&Carry.
Source: Euromonitor from trade sources/national statistics
Convenience stores. Chained grocery retail outlets selling a wide range of groceries with small
sales space (up to 300 sq. meters), located in urban residential areas. The store serves the local
market, and is often open 24 hours. In Russia, such retail sales points are increasingly replacing
neighborhood kiosks ("Magnit", "ABK", "Kvartal").
A trend towards convenience in grocery retailing is evident in Russia. Consumers are keen to save time
on shopping and they are willing to visit the local neighborhood store on the go instead of a large
supermarket or hypermarket. More and more small neighborhood stores, open 24-hours, are appearing.
These outlets offer home and personal care products, newspapers and magazines, groceries, alcohol and
sometimes flowers in one place.
The convenience store format has been growing rapidly in Russia in terms of number of outlets and
retail sales. In 2010, sales grew by 19 percent to reach $7.3 billion, while the number of convenience
stores increased by 11 percent to reach 4,000 units. Magnit is the leading player in convenience stores in
Russia, accounting for an 83 percent share of retail value sales.
Figure 6. Russian Retail Market Share By Company in 2010. Convenience stores.
Source: Euromonitor from trade sources/national statistics
Forecourt retailers. Grocery retail outlets selling a wide range of groceries from a gas station
forecourt. As a rule, the stores have extended opening hours, selling area of less than 400 sq.
meters, and handle two or more of the following product categories: audio-visual goods (for sale
or rent), take-away food (sandwiches, rolls or hot food), newspapers or magazines, cut flowers
or potted plants, greetings cards, automotive accessories (BP Connect, Shell Select).
Forecourt retailers remained an underdeveloped format in Russia, compared to U.S. standards; only 25
percent of all petrol stations in the country had a forecourt store in 2010. With the entrance of foreign
petrol stations onto the market, their growth is accelerating. Modern foreign brands (BP Connect, Shell
Shop and Statoil) focus mainly on high-end consumers, offering higher-priced confectionery, ice cream
and beverages, etc. This results in higher retail value sales per outlet. Most national operators have
difficulty in establishing efficient logistics for non-core grocery retailing. Nonetheless, the domestic
player Neft Activ (Podsolnukh, the former Yukos brand) led chained forecourt retailers with a 25
percent share of retail value sales in 2010.
Figure 7. Russian Retail Market Share By Company in 2010. Forecourt Retailers.
Source: Euromonitor from trade sources/national statistics
Table 1. Russia: Sales in Retailing by Sector in 2010, $ US Million
F % change % change ormats 2006 2007 2008 2009 2010
Store-based Retailing 195284.7 250340.9 308116.3 248457.4 292574.5 17.76 49.82
Grocery Retailers 106824.8 139808.0 176414.9 155810.5 188760.4 21.15 76.70
Specialists 3555.9 4422.4 5052.7 4355.8 5162.9 18.53 45.19
Hypermarkets 6509.9 10559.9 15709.0 14315.4 18066.0 26.20 177.52
Small Grocery Retailers: 37562.8 47955.6 59211.2 52987.0 62969.5 18.84 67.64
Convenience Stores 3051.1 4694.1 6260.5 6136.3 7331.0 19.47 140.27
Forecourt Retailers 319.3 374.9 420.8 331.4 400.3 20.79 25.37
Grocers 34192.4 42886.6 52529.9 46519.4 55238.1 18.74 61.55
Supermarkets 38275.8 50954.8 64886.3 57269.6 71703.0 25.20 87.33
Other Grocery Retailers 20920.4 25915.2 31555.7 26882.6 30858.9 14.79 47.51
Non-Store Retailing 6417.8 9214.8 12017.4 10692.7 13251.3 23.93 106.48
Direct Selling: 2122.2 2678.0 3398.6 2772.9 3230.4 16.50 52.22
Food and Drink Direct
Selling 67.9 95.2 125.6 - - - -
Home Shopping: 1553.1 2338.8 2850.7 2578.1 3132.9 21.52 101.72
Food and Drink Home
Shopping - - - - - - -
Internet Retailing: 2497.7 3830.6 5261.8 4963.5 6464.0 30.23 158.80
Food and Drink Internet
Retailing 37.0 90.7 133.4 137.3 175.9 28.11 375.41
Vending: 244.8 367.5 506.2 378.2 424.0 12.11 73.20
Packaged Drinks Vending 82.2 121.1 169.6 130.4 144.0 10.43 75.18
Packaged Foods Vending 35.5 45.1 59.0 54.2 66.8 23.25 88.17
Vending 107.7 163.3 226.7 173.1 194.2 12.19 80.32
Other Products Vending 19.1 37.7 50.4 20.1 18.5 -7.96 -3.14
Source: Euromonitor from trade sources and national statistics
Table 2. Russia: Advantages and Challenges for U.S. Exporters
Population of 141.9 million people who are The relatively low purchasing power of many
potential consumers. The U.S. is the sixth largest Russian consumers, particularly in the regions,
importer in Russia (by volume) of food and and the consequent reduction in demand for
agricultural products. durable goods, and premium grocery and non-
Russia?s retail sector is growing rapidly (nearly Economic vulnerability, dependence on oil and
18% from 2009-2010), which creates a number of mineral extraction for most wealth.
opportunities for prospective U.S. exporters.
The ongoing development of the mass grocery Distance in Russia is one if the major barriers
retail industry will allow producers to route complicating logistics for the retail chains.
products to the market more efficiently.
Significant number of consumers can afford Per capita spending in the regions outside
purchasing high-quality food products. Moscow and St. Petersburg remains quite low.
Urban life style changes increase demand for semi- Rapid development of local manufacturers of
finished and ready-to-cook products. ready-to-cook products creates tough competition
for similar imported goods.
American-made food and drinks are still new for Growing number of domestically produced
the majority of the population, and popular among generic products; lack of knowledge of American
the younger generation. products.
In general retailers are open to new products in Strong competition with suppliers of similar
order to attract customers. products from Russia and European Union.
Existence of large importers experienced in High corruption, difficulties in finding a reliable
importing food products to Russia. partner or distributor.
Paying in dollars is advantageous for exporting to Russian government bureaucracy and corruption.
Russia compared to Europe due to the lower cost of Contradictory and overlapping regulations.
the dollar relative to the euro. Official government opposition to growth in food
Russian trade and investment policy is converging Dragging on of Russia?s World Trade
with international standards. Organization (WTO) accession; presence of non-
tariff barriers such as unscientific sanitary and
Investors are building more efficient storage Despite huge potential, regional markets require
facilities, improving infrastructure and logistics. substantial upfront investment in infrastructure
and facilities, and transportation infrastructure
between cities and regions remains extremely
The Russian government has committed to Lack of reform in the Russian agricultural sector
spending billions on infrastructure over the next 10 has led to high raw-material costs and shortages
years, particularly railroads and highways, which for processors.
should translate to better logistics for expanding
Major Retail Trends
Mergers and Acquisitions
The economic crisis stimulated Mergers and Acquisitions (M&A) in the retail industry throughout the
country. Nevertheless, the Russian retail market is still highly fragmented with the 11 largest retailers
(by revenue) controlling only 18 percent of the market, versus 80 percent for the 10 largest retailers in
In 2010, consolidation resulted mainly from several bankruptcies. Acquisitions occurred as a result of
high indebtedness and the lack of finance for operating purposes. Some retailers closed their
unprofitable operations in order to survive and pay off their debts as consumer traffic switched to
X5 Retail Group acquired the Kopeyka chain of supermarkets. The company rebranded Kopeyka outlets
as Pyaterochka and Perekriostok supermarkets. The player diversified into internet retailing through the
acquisition of e-shops belonging to eHouse Holding. X5 Retail Group continues to consolidate its
franchise operation. In 2009, the company acquired Artorg-Rostov OOO, a franchisee, for $13 million,
while such a deal could have cost as much as $48 million before the financial crisis.
In early 2011, Dixie Group announced plans to purchase Victoria Group. Both companies are among the
top 20 store-based retailers in Russia. This deal is scheduled to be finalized in 2011. As a result, Dixie
Group is expected to significantly improve its position and break into the top five in retailing in Russia.
Over the years, Wal-Mart made several acquisition attempts in Russia. It had a strategy of entering the
Russian market via acquisitions, since this would have given the retailer a strong presence quickly.
However, discussions with potential partners (e.g. Lenta) never panned out. As a result, Wal-Mart has
announced that while it remains interested in entering retailing in Russia through attractive acquisitions,
it has closed its Moscow office.
The biggest ever deal in Russia?s consumer sector came in December 2010 when PepsiCo announced its
$3.8 billion takeover of Wimm-Bill-Dann, the country?s biggest dairy products and juice company.
PepsiCo hopes the acquisition will help increase revenues three-fold from its nutritional segment by
2020. The deal will also make Russia Pepsi?s top international market, replacing Mexico. PepsiCo?s
purchase comes after rival Coca-Cola acquired Nidan, one of the leading juice makers in Russia early in
2010. This is Pepsi?s second major acquisition in Russia after it took over Russian juice maker
Lebedyansky for about $2 billion in 2008. The transaction will enable Pepsi make Russia the hub for the
production and distribution of nutritional food products worldwide.
According to Euromonitor?s forecast, the consolidation process will intensify in next few years, due to
both the departure of weak competitors, and the revival of mergers and acquisitions from 2010, although
the government is expected to set more obstacles to monopolies in retailing channel. The core regulation
of the new Federal Law restrains the potential dominance of a single retailer in one region. The retailing
laws are expected to be amended over the next several years due to pressure from industry and in order
to create a healthy retail environment in Russia.
According to Euromonitor, private label?s share of retail sales was stable at 3 percent in 2010.
Companies offering private label products are still not used to competing with brands. Retailers confirm
that it is difficult to establish long-lasting and trusting relationships with contractors, as private label
manufacturing brings little profit. Besides, many Russian consumers are still brand-orientated, and they
are not ready to buy private label products in the necessary large volumes.
Nonetheless, retailers see private label products as offering strong advantages in terms of price
competition in the longer term. According to industry experts, private label?s share of total retail sales
may reach 10 percent during the next year.
In particular, grocery retailers have noticed the benefits of a private label strategy during the economic
downturn. An increasing number of consumers have become loyal to private label goods in recent times.
The leading retailers are investing in better packaging and improving the quality of private label
offerings. X5 Retail Group plans to develop premium private label products for distribution through its
hypermarkets and high-end Perekriostok Green supermarkets. Azbuka Vkusa launched its Pochti
Gotovo private label in its high-end supermarkets in October 2010. In the short-term, the company plans
to offer premium private label products made on Russian farms.
In the medium-term, grocery retailers will be more active in developing private label products. X5
Retail Group aims to increase private label?s share of the total range in Perekriostok supermarkets to 30
percent, to 50 percent in Pyaterochka outlets and 10 percent in Karusel hypermarkets. Optimistic plans
have been reported by all low-end supermarkets. These retailers aim to increase private label?s share of
total sales in their outlets to 25- 30 percent in the short-to-medium term.
Organic, Healthy and Ready-to-Cook Products
Busier lifestyles, particularly in the large industrial cities, has created a steady growth in demand for
products such as chilled ready meals and frozen ready-to-cook products. As a result, supermarkets,
hypermarkets, and independent grocery stores have improved their offerings of chilled and ready-to-
cook meals. In addition, a health-conscious trend has led to a greater offering of healthy, low-fat, salt-
and sugar-free foods, fresh exotic fruits and vegetables. The assortment is wider particularly in large
cities such as Moscow and St Petersburg and in Vladivostok where fresh fruits and vegetables are
available from the Western United States and China. High-end supermarkets also began to develop
ranges of organic foods, and some entrepreneurs have tried to develop supermarkets specializing in
The sales value of organic packaged food in 2010 grew by 14 percent to reach $220.6 million. Organic
baby food shows the fastest development with growth of 25 percent in current sales value and 11
percent in volume. Experts estimate future sales of organic products could reach $255 million in 2011.
The growth is expected to be most significant in the larger cities, such as Moscow and St. Petersburg,
where consumers are wealthiest and most open to following Western trends.
The market for domestically-produced organic food in Russia has been hampered by a lack of official
legislation. At present, there are various self-certification schemes in operation, as well as technical
requirements for organic food production approved by Gosstandard (the government standards
committee), but a single legislative base addressing the need for unified organic standards has not yet
Most organic products are imported from Europe and sold in specialty shops in areas where the
wealthiest Russians live, as well as other premium shops, like Grunvald and Azbuka Vkusa in Moscow,
which are well known for the distribution and promotion of value-added green and healthy products.
Domestic manufacturers are searching for ways to gain a larger share in this niche, including voluntary
For more information on Russian organic market please see the Gain report
Consumers in industrial centers prefer to spend less time shopping and consequently choose one-stop
outlets. As a rule, shopping malls located in city centers have one or more cinemas, restaurants, grocery
retailers, durable goods retailers, souvenir stores, beauty retailers and beauty salons. Some property
developers allocate space for sports and fitness clubs under the roof of a shopping mall.
Local government authorities have recognized the advantages of megastores in the cities and created a
favorable environment for the rapid development of hypermarkets, megastores of all types and shopping
malls. Shopping malls and megastores are appearing on the sites of former outdoor markets, which have
been vanishing. In 2010, there were around 300 malls and shopping centers in Russia, with selling space
varying from 2,000-80,000 sq. m. The total selling space reached seven million sq. m., around 10
percent of the total selling space in the country.
Russian consumers mainly shop online for non-grocery products. However, internet retailing?s growth
rates remained high last year. In 2010, sales grew by 30 percent to reach $6.5 billion which has
exceeded the growth rates of store-based retailing. Companies are entering the online channel in search
of high potential sales and annual growth rates. Even during the recession of 2009, when consumer
demand decreased considerably, e-commerce recorded considerable sales growth. The main reasons for
growth are: stronger presence and competition, discount prices, the development of broadband
connections in Russia?s regions, and the desire of Russian consumers to make savings.
One of the obstacles to the faster development of internet retailers is the underdeveloped system of e-
payments. Currently most e-shop operators accept cash on delivery. It is still true that Russian
consumers do not trust e-payments. Only 10 percent of e-shops offer the option to pay by debit/credit
cards. Industry experts explain that e-shop operators prefer to call to consumers before the final
confirmation of purchase. The PayPal system of security for e-payments has recently opened a
subsidiary in Russia, but it mainly serves foreign e-shop operators. In Moscow, traffic may also be a
factor limiting internet and delivery sales.
The largest store-based grocery retailers offer the same product ranges and prices online. Industry
experts consider the development of online grocery stores to be immature. Russian consumers are not
used to shopping for groceries online, and they have difficulty using the technology for this purpose. It
is still perceived to be less stress and less time consuming to visit the local supermarket than to shop for
groceries online. However, this situation is regarded as temporary and online grocery retailing has great
Russian regions will gradually increase their purchasing activity due to independent small operators as
well as the penetration of major store-based federal chains which have recently entered the niche. For
example, last year Auchan Group announced plans to become a visible Internet retailer in Russia. X5
Retail completed the logistical and IT platform necessary for Internet retailing. Such operators have the
benefit of distribution centers covering several regions of Russia, which will help develop Internet
retailing in the regions more actively in future.
Legislation Regulating Retail Trade
The Russian Federal Law on Trade came into force on February 1, 2010. The Law is aimed at creating
transparency between suppliers and retailers and boosting competition in the retail sector. The Law
contains strict antimonopoly regulations, such as capping store openings once a retailer reaches a 25
percent market share within a city or municipal region, a 10 percent limit on retailers' bonuses paid by
suppliers, and payment terms regulating how fast a retailer has to pay for goods with a certain shelf life,
among others. Currently, the government expects to coordinate the amendments to the Federal Law on
administrative offences, relating to its application. It is suggested that penalties will be set at the
following levels: $1,000-$1,500 for officials and heads of companies; up to $300,000 for legal persons
or 1-3 year disqualifications.
Russian retailers repeatedly expressed worries about overregulation of commerce, pointing to the risk of
a hike in prices and a sharp decrease in the assortment of foodstuffs in Russia. At the same time, the
new Federal Law does seem to remove some restrictions on retailers. For example, the Federal
Antimonopoly Service gave approval to X5 Retail Group?s acquisition of the Kopeyka chain, albeit with
some small limitations. Thus, it obliged X5 Retail Group to close or sell around 30 stores out of its 700-
strong network. Nonetheless, this shows that the new legislation is not simply creating restrictions to the
development of retail chains.
Currently retail chains are gradually adapting their activities according to the Law. And although there
has been no noticeable effect yet, some retailers are starting to change their assortment strategy, for
example, cutting out duplications in some categories as well as slow moving goods. As a result, the
number of suppliers also is being refined and reduced, sometimes in favor of big brands, sometimes in
favor of local suppliers. At this time it?s difficult to predict who will be most affected. We will likely
see more effects of the Law on the market in the close future, when all retail activities are brought into
accordance with the Law.
For more information on Russian Federal Law on Trade please see Gain Report RS1039
Section II. Road Map for Market Entry
Advice to Exporters
The best entry strategy for new exporters depends on several factors, including: the target market,
economic conditions, and host country regulatory environment as it relates to the products in question.
Exporters can request a brief market assessment for their products and/or a list of Russian importers
from the ATO Moscow, St. Petersburg and Vladivostok. Additionally, ATO Moscow offers the
following recommendations to help exporters select the best approach for their firm:
A prospective entrant is advised to estimate market prospects for their product with respect to
consumer preferences and incomes, local competition and sales channels (marketing research
from a specialized consulting firm may be required).
Establish a Representative Office: One of the best ways exporters can conduct business in Russia
is to open a representative office. Depending on the product and target market, an office might
be situated in Moscow, a city that hosts a large concentration of retailers and representative
offices; St. Petersburg, the port city through which the largest volume of sea-borne freight
passes; or Vladivostok, the principal transpacific gateway to the Russian Far East.
Work with a Russian Importer: Selecting the right trade partner is one of the most important
decisions for exporters developing their business in Russia. Working with a local partner in
Russia significantly expands business opportunities, and minimizes the need for exporters to
establish direct contact with multiple retail chains. A local Russian partner familiar with market
conditions and the regulatory environment can help exporters navigate the Russian retail market,
resolve issues, and increase the likelihood of success.
In order to make the first delivery, usually a large local import company is chosen. The company
should have a good reputation and experience in customs clearance, and must have storage facilities and
a developed distribution network. Make sure the company has experience working with Western
suppliers and has experience in arranging regular supplies of food products. Western companies that
strive to supply directly, circumventing Russian mediators, often sustain losses due to lack of local
market knowledge. A large domestic import company is usually bettered adjusted to local conditions,
with established trade ties and contacts in state structures.
Exporters representing U.S. companies may contact the Moscow ATO for assistance in locating
importers. Performing due diligence is critically important, such as verifying banking and supplier
references of potential importers, and local and U.S.-based organizations in Russia can provide helpful
information to exporters. However, credit reporting is a relatively new practice in Russia, and credit-
reporting agencies may not have complete information on potential Russian business partners. Retail
chains may be another valuable source for exporters collecting information on importers.
Provide Sales Support: Exporters must help market the products they sell in Russia. Russian
importers and wholesalers expect exporters to participate in the sales process, either by
providing event marketing support, advertising assistance, training, packaging/handling advice,
or point of sales materials.
Attend Promotional Events: One of the main challenges to exporters entering the Russian market is
product promotion. A cost-effective way exporters can promote their products is to participate in one of
the largest general food and beverage trade shows in Russia, World Food Moscow, held annually in
September. If exporters are targeting specific regions within Russia, the Moscow ATO recommends
participating in regional exhibitions. Participation fees for regional exhibitions are lower, and are aimed
at local consumers and retail food chains. The Russian retail market is competitive; exporters should
allocate time to visit Russia and earmark funds in their sales plans for promotional support.
Imported products arrive in Russia via land, sea, or air freight into ports or customs warehouses for
clearance before proceeding to the next destination. The transportation system for shipping U.S. high
value food products into Russia via St. Petersburg and Moscow is well established. Most consumer-
oriented food and beverage products enter through St. Petersburg or Moscow for customs clearance.
Transit times range from 20 days to 27 days depending on the origin, with an additional four days
shipping time for final delivery by rail or truck to Moscow.
Outside of Russia, imports are also delivered to Baltic ports and then shipped by truck or rail to St.
Petersburg or Moscow. Baltic and Finnish ports had offered greater efficiency, fewer problems with loss
or damage, and lower port fees. However, changes in Russian import requirements have largely
redirected these shipments to Russian ports: St. Petersburg, Ust-Luga, Vysotsk, Kronshtadt,
Novorossiysk and Vladivostok.
From Moscow or St. Petersburg, products are shipped further into the interior via truck or rail to cities
in Siberia or the Russian Far East (RFE). However, most products destined for the RFE enter through
the ports of Vladivostok, Vostochnyy, Vanino, Nakhodka and Magadan. Although Vostochnyy is the
region?s largest port by volume, the majority of U.S. food exports to the Russian Far East enter through
Currently several forwarders make shipments from U.S. West Coast to Vladivostok: Hyundai Merchant
Marine, MAERSK LINE, APL, and Hapac Loyd. Average transit time from the U.S. west coast to
Vladivostok takes 18 days: ocean vessels bring containerized goods to the Korean Port of Pusan (it
takes 9 to 13 days), then, feeders transfer them to the Port of Vladivostok (it takes 4 to 7 days).
MAERSK LINE has the longer transit time, because it goes though Japan first, then delivers goods to
Korea (Pusan). In 2008 FESCO launched a direct line from Everett, Washington to RFE ports
(Vladivostok, Korsakov, Petropavlovsk, and Magadan). Direct voyages are scheduled approximately
once per month and the average transit time is 14 days. From Vladivostok food products are shipped to
the other cities in the RFE and Siberia by truck or rail.
Imported food products for Russian retail chains and food service establishments come through
importers, distributors, and wholesalers. Large suppliers are typically also importers.
Figure 8. Russia: Distribution Channel for Supermarkets, Import of Transatlantic Products via
the Port of Greater St. Petersburg
Figure 9. Russia: Distribution channel for food retail chains, delivery from U.S. to the Russian
Table 3. Russia: Major Retail Chains, 2010 (Retail Value excl. Sales Tax)
Re No. of tailer name and Ow 2010, nership outlets, Locations
outlet type $US
M 2010 ln.
Pyaterochka, X5 Retail Group 8,936 1,712 Moscow and St.
discounters NV, local Petersburg, and 16
Magnit, discounters Magnit OAO, local 6,068 4,055 470 Russian cities
Auchan, Auchan Group SA, 5,715 26 Moscow and St.
hypermarkets French Petersburg, Russian
Metro Cash& Carry, Metro AG, German 3,893 57 36 Russian regions
Perekriostok, X5 Retail Group 3,081 332 Moscow, St. Petersburg
supermarkets NV, local and 43 Russian cities
O'Key, Dorinda Holding 2,606 50 St. Petersburg, Moscow
hypermarkets & SA, Luxemburg, and 8 Russian cities
supermarkets local, Estonian
Karusel, X5 Retail Group 2,233 65 Moscow, St. Petersburg
hypermarkets NV, local and regions
Lenta, hypermarkets Lenta OOO, 60% 2,076 37 North-Western Russia and
local, 40% U.S. Siberia
Dixie, discounters Dixie Group OAO, 2,074 548 Moscow, St. Petersburg
local and 11 regions
Kopeyka, Kopeyka TD OAO, 2,054 591 Mainly Moscow region
discounters local and European Russia
Liniya, Korporatsiya GriNN 891 21 9 Russian regions
hypermarkets ZAO, local
Monetka, Monetka Torgovaya 886 228 Ekaterinburg, Ural region
discounters Set? OOO, local
Spar, supermarkets Internationale Spar 885 219 Moscow and Central
Centrale BV, Dutch region
Sedmoi Kontinent, Sedmoi Kontinent 852 95 Moscow, St. Petersburg,
hypermarkets & OAO, local Kaliningrad and Minsk
Globus Gourmet, Stolichnaya 848 7 Moscow
supermarkets Kompania OOO,
Kvartal, Victoria-Group 803 167 Moscow, St. Petersburg,
supermarkets OAO, local Kaliningrad and regions
Maria Ra, Maria Ra PKF OOO, 752 243 Siberia
Real, hypermarkets Metro AG, German 737 18 Central part of Russia
Giperglobus, JR east Retail Net 642 5 Moscow region
hypermarkets Co Ltd, German
Kirovsky, Kirovsky 496 144 Ekaterinburg, Ural region
supermarkets Supermarket ZAO,
Alpi, supermarkets AMK-farma ZAO, 479 54 Siberia
Billa, supermarkets Billa Russia OOO 457 46 Moscow and Central
(Rewe Group), region
German & local
Nash Gipermarket Sedmoi Kontinent 451 13 Moscow and Russian
OAO, local regions
Auchan City, Auchan Group SA, 444 14 Moscow and Moscow
supermarkets French region, St. Petersburg,
Mosmart, Mosmart GK, local 404 17 Moscow and St.
supermarkets Petersburg, Russian
Gorodskoy Moscow and Moscow
Azbuka Vkusa, Supermarket OOO, region
supermarkets local 399 40
Sources: Euromonitor International, company reports and websites
Section III. Competition
Retailers demand consistent quality and adherence to contract specifications and penalize suppliers for
failure to meet requirements. As a result, foreign suppliers continue to be competitive in the Russian
market as they are more accustomed to meeting such strict specifications than Russian agricultural
U.S. exporters face heavy competition among other foreign suppliers for the Russian market. The
European Union enjoys a logistical advantage due to its proximity and ability to ship product overland
as well as by air and sea. Brazil occupies a dominant position on the Russian meat market because of a
preferential duty (25 percent lower than for U.S. meat), despite chronic outbreaks of foot-and-mouth
and other livestock diseases. China dominates the Russian Far East market for fruit and vegetables.
In addition, the Government of Russia took a number of steps to protect domestic producers of food
products. This resulted in high import tariffs and a complicated system of sanitary and phytosanitary
requirements. The economic crisis decreased individual incomes and drove consumers to purchase
cheaper domestically produced products. All of these factors contributed to the robust development of
the domestic food-products industry. Production of dairy and meat products (sausages, smoked foods),
soft drinks, mineral water, juices, beer, confectionery, various appetizers, and chilled chicken meat is
still on the increase. Introduction of high import duties made legal imports of many foreign food
products unprofitable. Belarus and Kazakhstan, which share a common customs zone with Russia, enjoy
duty-free access to the Russian market. Therefore, their agricultural products do not appear in Russia?s
import statistics. Many imports from the EU and the United States cannot compete on price with CIS
goods. There is also increasing political pressure on retailers to buy locally.
Table 4. Russia: Top Ten Origins of Agricultural Products Imports 2008-2010, $US Mln.
Country 2008 2009 2010 % Market Share, % change '09-
--The World-- 30,590.0 25,711.1 30,599.3 100.00 19.01
Brazil 4,070.6 3,233.2 3,826.1 12.50 18.34
Germany 1,949.9 1,714.4 2,190.0 7.16 27.74
Ukraine 1,726.2 1,238.7 1,752.1 5.73 41.44
Netherlands 1,588.6 1,329.2 1,699.8 5.55 27.88
Turkey 981.0 1,103.3 1,443.7 4.72 30.86
United States 2,092.8 1,711.8 1,277.6 4.18 - 25.37
China 1,129.9 980.3 1,140.3 3.73 16.32
France 1,063.2 825.8 1,091.8 3.57 32.21
Poland 727.1 800.4 999.0 3.26 24.82
Spain 815.9 689.7 941.0 3.08 36.43
Source: Global Trade Atlas
Table 5. Russia: Main Delivery Sources and Volumes of Specific Product Import, 2010
2010 Strength of Key Advantages and
Commodity Rank Country Percent Supplying Disadvantages of Local
Share** Countries Suppliers
Net imports, Countries of South Lack of storage facilities;
MT 1 Turkey 16.21 America, Spain, low cost of local products
5.4 million 2 Ecuador 14.01 Morocco, Turkey
Dollar value 3 China 5.21 supply citrus fruits at
4,571 m low price illion 4 Poland 5.08
5 Spain 4.86
6 Uzbekistan 4.84
7 Morocco 4.59
Net imports, High quality of Lack of modern storage and
MT 1 Turkey 22.97 vegetables produced in processing facilities; stable
2.95 million 2 Netherlands 13.36 Western European and good quality supplies to
Dollar value 3 China 11.15 countries, low prices the retail chains are
2,025 m for the products complicated illion 4 Israel 6.83
originated from the
5 Uzbekistan 5.77 CIS states
6 Poland 5.61
7 Spain 3.91
8 Ukraine 3.54
Net imports, Import of well-known Traditionally high number
MT 1 Netherlands 26.53 pet food trademarks to of home pets, large market
65,066 2 France 16.87 Russia dominate in low potential; low demand for
Dollar value 3 Germany 10.43 segment. U.S. brands industrially produced pet
139 m are perceived as high food illion 4 Thailand 7.95
5 Italy 6.49
6 Canada 5.42
7 Hungary 5.27
8 Austria 4.87
Net imports, United U.S. product is much Restrictions U.S. poultry;
MT 1 States 38.39 cheaper; Brazilians TRQs; Producers can supply
0.65 million 2 Brazil 29.87 have price advantage chilled product; producing
Dollar value 3 Germany 14.36 in whole birds of domestic chicken are
862 m supplies, EU in totally insufficient illion 4 France 4.67
5 Denmark 2.98
6 Netherlands 2.26
7 Hungary 1.73
Processed Fruits and Vegetables
Net imports, Well established trade Local producers quickly
MT 1 China 16.88 relations and well update the facilities
1.4 million 2 Poland 12.74 known trademarks; low availability of cheap raw
Dollar value 3 Spain 8.02 price of products materials, traditional local
1,457 m brands illion 4 Ukraine 6.55
5 Tajikistan 5.62
6 Turkey 4.8
7 Thailand 4.52
8 Chile 3.87
Net imports, High quality and low Limited list of rice varieties
MT 1 Thailand 27.26 prices in Asian grown in Russia, lack of
222,248 2 Vietnam 26.34 countries product modern processing
Dollar value 3 Pakistan 20.81 which dominate on the equipment
122 m market illion 4 China 5.86
5 Uruguay 4.46
6 Myanmar 4.06
7 States 3.53
8 Kazakhstan 2.64
Red Meat (fresh, frozen, chilled)
Net imports, Lower prices of Brazil Low cost production, Local
MT 1 Brazil 36.87 meat because of lower supplies are not stable in
1.6 million 2 Germany 10.45 duties, good quality quality and not uniform;
United Lack of beef cattle and lack
Dollar value 3 States 7.23 of high-quality beef
4,615 million 4 Uruguay 6.21
5 Denmark 5.52
6 Paraguay 4.91
7 Canada 4.54
8 Australia 4.45
9 Argentina 4.42
Net imports, Norway supplies high Outdated cold storage
MT 1 Norway 92.43 quality product. facilities and fleet,
90,530 2 Denmark 2.4 Norwegian exporters outmoded processing
Dollar value 3 Chile 2.05 use state promotion facilities, problems with
524 m programs securing quotas for fishing illion 4 Estonia 0.84
Uni in international waters ted
5 Kingdom 0.67
6 Canada 0.44
7 Turkey 0.3
8 States 0.28
Fish and Seafood
Net imports, Norway supplies a Outdated cold storage
MT 1 Norway 39.98 wide range of high facilities and fleet,
965,366 2 China 10.91 quality products and outmoded processing
Dollar value 3 Iceland 4.45 secures regular facilities, problems with
2,150 m deliveries securing quotas for fishing illion 4 Canada 4.29
Uni in international waters ted
5 Kingdom 3.74
6 Chile 3.68
7 Vietnam 3.43
8 Denmark 3.24
9 Japan 2.7
10 States 2.41
Net imports, Reducing delivery A lot of local producers,
MT 1 Ukraine 48.83 costs because of the Lack of modern processing
282,117 2 Poland 12.97 geographical facilities
Dollar value 3 Germany 9.38 proximity, therefore,
910 m prices are lower illion 4 Italy 4.55
5 China 3.05
6 Belgium 2.85
7 France 1.86
8 Switzerland 1.73
Net imports, United Iran, Turkey mainly Lack of large-scale
MT 1 States 24.66 supply hazelnut and industrial production of
75,549 2 Iran 20.64 pistachios at low nuts; Intensively developing
Dollar value 3 Ukraine 13.69 prices, Azerbaijan ? confectionery industry
335 million 4 Vietnam 10.19 hazelnut, and the USA
5 Turkey 7.71 - almonds
6 Azerbaijan 6.27
7 Indonesia 2.29
8 Tajikistan 2.11
9 Brazil 1.88
Wine and Beer
Net imports, L 1 Italy 28.88 European wines Low prices; poor positioning
829 million 2 France 16.92 occupy the upper of high quality vintage
Dollar value 3 Ukraine 11.5 segment and are wines; traditional preference
1,075 m perceived as high for sweetened wines illion 4 Spain 9.4
quality; beer imports
5 Germany 5.96
6 Moldova 4.47
7 Chile 3.76
8 Republic 3.39
9 Bulgaria 2.56
Source: Global Trade Atlas
** If U.S. is not listed, share is less than 1%
Section IV. Best Product Prospects
The Russian Federation is among the top export destinations for U.S. agricultural products. The U.S. is
the sixth largest supplier to Russia (by value of food and agricultural products). Top performing retail-
oriented U.S. exports to Russia in 2010 included poultry and red meats, fresh and processed fruit and
vegetables, nuts, fish and seafood, spirits and snack foods.
Based on official data, the U.S. share of Russia?s agricultural imports exceeded $1.2 billion in 2010.
On average, poultry meat accounted for 38 to 50 percent of the total value of U.S. agricultural exports
from 2006 to 2009 and represented roughly 20 percent of Russia?s total poultry imports. In 2010,
Russia banned U.S. poultry for three-quarters of the year. Despite Russia?s resumed import of U.S.
poultry from October 1, 2010 the share of poultry in U.S. exports to Russia decreased by 56 percent in
Nevertheless, in 2010 poultry still dominates U.S. agricultural trade to Russia and accounted for roughly
$331 million, followed by pork, beef, tree nuts, fish and seafood. Due to the economic crisis and
shrinking of poultry sales, U.S. agricultural exports to Russia decreased by 25 percent in 2010. The U.S.
share of Russia?s total agricultural imports in 2010 was 4.18 percent compared with 6.65 percent in
Due to consumption patterns, Russia will remain an attractive market for poultry imports for the next
several years, particularly for affordable and frozen poultry cuts that do not compete against
domestically produced chilled whole birds (for more information please see Gain report
The most dynamic growth in the high-valued sector compared to 2009 was shown by such categories of
products as jams and fruit jellies, tomato ketchup and other tomato sauces, frozen potatoes, prunes,
nonalcoholic beverages (excl. fruit and veg. juices), fresh grapes, ice cream, and almonds.
In 2010, the United States exported 14,572 MT of tree nuts to Russia and became the second largest
supplier of tree nuts following the Ukraine. The main driver of this growth was the increase in
California almond exports. California pistachios are also present in the market but volumes fluctuate
based on price competitiveness, particularly with Iranian pistachios (for more information on Russian
nuts market please see Gain report RSATO1108 http://gain.fas.usda.gov/Recent%20
Given the potential of the Russian agricultural market, the U.S. high value products can penetrate some
niche markets, especially for those products which are not produced in Russia or are produced in limited
quantities. In many cases, Russian agriculture is not capable yet of producing products of consistently
high quality (e.g. high quality beef steaks). There are markets for baby food or for specialty products
including low-fat, low-salt and sugar-free products, cake & bread mixes, corn meal, and chocolate
chips. U.S. suppliers could also supply new market segments that are just beginning to develop. This
includes organics, microwaveable and semi prepared food as well as TV-dinners. Potential importers
must be aware that promotion of innovative or new to market products is expensive.
Table 6 (below) provides additional information on food and agricultural product prospects .
Table 6. Russia: Suggested Best Prospects for U.S. Exporters by Sector
US growth Key Constraints to Attractiveness of
Prod Import of import uct
volum Import taxes Market the market for the e over the Development USA
($ US last 5
mln.) years, %
Poultry 331.2 2.1 See GAIN Competition with U.S. product has
RS5084, RS7008 Brazilian and EU well-established
and RS7041. producers; Quick position; Low prices
Tariff-rate quotas growth of domestic attract buyers. Local
apply to some production; producers will not
items. Tariffs Perception of U.S. be able to satisfy
change product as cheap and demand in near
unpredictably. of low quality. future.
and demands do not
goal of ?food
security? calls for
reduction of meat
Pork 177.7 22 See GAIN Competition from Shortage of pork in
RS5084, RS7008 Brazilian pork, the country;
and RS7041. complicated import declining
Tariff-rate quotas procedures. production; high
apply to some Veterinary controls prices; Demand for
items. Tariffs and demands do not stable deliveries of
change follow international both cheap and high
unpredictably. standards. Official quality product.
goal of ?food New health
security? calls for certificates are in
reduction of meat place for U.S. origin
Food 96.9 1.6 20% but not less High competition Fewer Russians are
preparations than 0.25 Euro/kg from EU products; making food
plus 18% VAT Cheap canned food products (e.g.
for position 1704; niche occupied by canning) at home;
generally 5% + Russian trademarks. High-quality
18% VAT for product niche is not
items in 180620, completely filled.
but varies in
Beef 94.4 21.8 See GAIN Consumer unaware of Insignificant
RS5084, RS7008 U.S. high quality specialized beef
and RS7041. beef; Growing production;
Tariff-rate quotas domestic production; Constantly growing
apply to some Complicated import beef prices; Niche
items. Tariffs procedures. markets for meat
change Veterinary controls delicacies (steak,
unpredictably. and demands do not etc.) and meat offal;
follow international Fast HRI
standards. Official development; New
goal of ?food health certificates
security? calls for are in place for U.S.
reduction of meat origin beef.
Tree nuts 82.6 60.2 Nuts ? 18% VAT Iran biggest U.S. almonds and
Pistachios and competitor for pistachios enjoying
pecans 18% VAT peanuts and very strong growth.
+ 5% import duty pistachios; Tajikistan Good potential for
for walnuts. U.S. pecans.
Fish and 51.9 16.9 10% + 10-18% Regular deliveries of Growing demand
Seafood VAT high quality product for higher quality
from Norway; seafood from
Shortage of suitable consumers; Very
equipment at retail modest assortment
trade outlets; Deficit in markets;
of proper storage Significant demand
facilities with below from supermarkets
?20C temperature; and HRI sector.
Unaware of quality
and value of U.S.
Fresh Fruit 29.3 18.6 Apples: (Jan 1- Strong competition U.S. has good sales
Jul 31) 0.1 Euros from Poland, China, already and good
per kg (Aug 1- Chile, New Zealand, potential for growth
Dec 31) 0.2 Moldova for apples; U.S. apples, pears,
Euros per kg + Argentina and China grapes, citrus,
18% VAT for pears. especially during
Pears: 10% + February- April
18% VAT period.
Spirits 24.6 12.4 RUR 210/liter of Strong positions of Relatively high
ethyl alcohol other importers level of alcohol
content; VAT (France, United consumption;
18% Kingdom). Highly Demand for exotic
complex and drinks (whiskey,
nontransparent gin, rum, bourbon).
regulation. Whiskey and rum
Dried fruit 12.7 38.4 Prunes, apricot Sharp competition Intensive
10% import duty, with Iran and Turkey. development of
raisin -5% Desire of packers to confectionery
import duty + save on raw stock, industry and start of
18% VAT procuring low quality retail sales of rare
stock from Iran, dried fruits. High
Uzbekistan, and quality of U.S.
Pet food 4.6 12.8 20%, but not less Strong tradition of Traditionally large
than 0.16 feeding pets with number of home
Euros/kg + 18% table scraps; Strong pets; Increased
VAT local production with population incomes
foreign investments - followed by
Mars has two plants growing demand for
that produce pet food. ready to use pet
Snack Foods 3.3 16.6 5% - 15%, but Strong competition Good potential for
not less than 0.15 from local producers, high quality U.S.
? 0.075 Euro/kg including some snacks: popcorn,
(duty depends on foreign brands such nuts, and dried fruits
product, size of as Lay?s (PepsiCo) mixes.
package, sugar and Estrella (Kraft) ?
content, etc.) + Pringles from Europe.
10% - 18% VAT
Source: Global Trade Atlas, U.S. Trade Database, Russian Tariff Database (www.tks.ru)
 Food products listed in Table 6 are based on market intelligence, including discussions with retailers and
data analysis efforts, and should not be considered an official endorsement by the United States Department
of Agriculture or any affiliated agencies.
Section V. Key Contacts and Further Information
Contact Information for FAS Offices in Russia and in the United States
U.S. Agricultural Trade Office Headquarters, Moscow
Deanna Ayala, Director
Alla Putiy, Marketing Specialist
Olga Kolchevnikova, Marketing Specialist
Alina Streltsova, Administrative Assistant
Street address (for express parcels):
U.S. Agricultural Trade Office
Bolshoy Devyatinskiy pereulok, 8
121099 Moscow, Russia
Fax: 7 (495) 728-5069
Tel: 7 (495) 728-5560
For mail coming from the U.S. (delivery may take 4 to 6 weeks):
Director, Agricultural Trade Office
5430 Moscow Place
Washington, DC 20521-5430
For international mail, especially from Europe:
Agricultural Trade Office
U.S. Embassy - Box M
Itainen Puistotie 14
00140 Helsinki, Finland
Covering Northwest Russia (St. Petersburg):
Svetlana Ilyina, ATO Marketing Specialist
American Consulate General
Furshtatskaya Street 15
191028, St. Petersburg, Russia
Fax: 7 (812) 331-2675
Tel: 7 (812) 331-2880
Covering the Russian Far East (Vladivostok):
Oksana Lubentsova, ATO Marketing Specialist
American Consulate General
Ulitsa Pushkinskaya, 32
690001 Vladivostok, Russia
Fax: 7 (423) 230-00-89
Tel: 7 (423) 230-00-89
For General Information on FAS/USDA Market Promotion Programs and Activities:
Office of Trade Programs
U.S. Department of Agriculture
Foreign Agricultural Service
1400 Independence Ave., S.W.
Washington, DC 20250
FAS Website: www.fas.usda.gov