Information for fruit and vegetables business in CIS
Russian retailers slump in London as Putin bans food imports
Shares of Russian retailers fell in London and Moscow after President Vladimir Putin banned food imports from countries that imposed or supported sanctions against Russia.
Billionaire Sergey Galitskiy’s OAO Magnit (MGNT) declined as much as 4 percent in London, while Mikhail Fridman’s X5 Retail Group NV (FIVE) slid as much as 5 percent. Igor Kesaev’s OAO Dixy Group declined as much as 4.2 percent in Moscow trading.
Putin yesterday ordered a one-year halt on imports of food and agricultural goods from countries that introduced sanctions over Ukraine. Imports account for as much as 25 percent of retail sales in Russia, according to the Retail Companies Association. The ban covers beef, pork, fish, poultry, fruits, vegetables, cheese and milk from the U.S., Canada, the European Union, Australia and Norway. Domestic producers will supply the Russian market, Prime Minister Dmitry Medvedev said today.
“Retailers are falling as the import ban would mean slower revenue growth for them as they face a narrower assortment and additional costs to find new suppliers,” said Ivan Kushch, an analyst at VTB Capital. “If a customer specifically wants to buy Parmesan cheese and it’s not offered, he won’t buy it.”
Russian retailers will review their offering and change suppliers following Putin’s decision, Dixy Group Chief Executive Officer Ilya Yakubson said by e-mail.
Replacing the imports with domestic goods is “doable,” Andrey Karpov, executive director of Retail Companies Association said by phone. “The most challenging task for now would be replacing fruits and vegetables from the European Union.”