Uladzimir Matskevich: The sanctions from the side of Moscow will not stop the EU, but it turned out

The embargo on western products in Russia only seems to be a risky and odd step, but it might well be a well-planned action aimed to diversify the Russian market.

The counter sanctions of Moscow that aimed at limiting the supply of western products to the Russian market for a period of one year became a ground for jokes and apocalyptic predictions. Say, Russia cannot meet the needs of its citizens in products that is why the country can prepare for a return to the Soviet Union with its queues and shortages. But as Uladzimir Matskevich, the head of the Board of the International Consortium “EuroBelarus” believes, the maneuvers of Moscow are not that simple.

There is a great temptation to consider the decision of the Kremlin an unreasoned action in response to the sanctions against Russia from the side of Europe and the United States. But maybe it is, on the contrary, a well-considered measure associated with the diversification of the food market in Russia. I must say, the world food market today is being regulated and restrained artificially; otherwise Europe, for example, would be overtaken by overproduction. It is clear that the huge Russian market is extremely important for Europe, it is where they sell their surplus, - said Uladzimir Matskevich in the interview with EuroBelarus Information Service. - Probably, the embargo will not lead to serious disruptions in the Russian food market. But to calculate the consequences we have to closely examine a number of factors. I cannot leave out the possibility that the Kremlin’s decision could lead to a strategic diversification of the food market in Russia switching it to other producers. The decision also affects the country members of the Customs Union - Belarus and Kazakhstan. The Russian sanctions open additional possibilities for these countries: the Belarusian and Kazakh products can occupy the part of the market that is exempt. But it also has a negative impact on our state. For example, Belarus buys most of the imported foods from wholesale enterprises in Moscow, because at some point our country did not establish any logistic or wholesale centres that could provide food imports to Belarus through the residents of the country. So if Moscow centres cease importing goods from Russia, respectively these products will be distributed to Belarus in a lesser amount. On the other hand, it may become a positive development for Belarus as our country, willingly or not, will have to create a wholesale network, to purchase without Russian mediation. Therefore, the decision is very ambiguous. To amateurs and hotheads I would advise not to make any conclusions that fill the Internet now.

-The Internet grieve over the closure of the Russian market to whiskey, cheeses with mild and other products that are for sure produced neither in Belarus nor in Kazakhstan…

-Let’s not exaggerate the importance of non-essential goods, goods that can be considered luxury items. Whiskey? I think that for the time-being there will be enough of the stock of it, then there will be a price increase for such goods and the market segment where these products are bought will not even notice it and will not react. I do not think that consumers who buy these goods are very much worried. In addition, the market for the rich, the luxury market has been in the “grey” zone since the times of the Soviet Union. I believe the grey and black markets will only welcome the restrictions. The prices will go up, but the market volume will not. Consumers should apprehend the shortage of essential goods of average price. But basically it is not a big deal. Again, we come to the idea of market diversification as a consequence of Moscow sanctions.

-European web-sites demonstrate the alert of food producers, farmers are demanding compensations for unsold goods to Russia. The EU is not going to back down?

-I don not think it will stop Europe in terms of sanctions, but for the EU it is a really painful and sensible blow, because the food market and farmers market in Europe has been regulated for a long time and now it is practically a socialist market. There is no free competition, there are quotes for all goods, the production is licensed, and different countries have different specialization. Therefore, the actions of Russian can cause a serious damage to certain segments. They can, but again, they not necessarily will. There are already jokes about Belarusian oysters in Russia, and as I see, they are not far from the truth. The products of the same assortment will be delivered to Russia, but not from the EU, they will be marked as if produced in Belarus or Kazakhstan. That is why a simple calculation of losses is hardly appropriate; other mechanisms will gain from this situation. As the market in the CIS and the Customs Union is still primarily grey, the change of supply schemes, calculations, the determination of manufacture countries are just working conditions that are possible to adapt very quickly.