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Economy


With shortages a thing of the past, Russians are paying more attention to the food they consume. What’s on offer leaves much to be desired.


NATALYA FEDOTOVA SPECIAL TO RUSSIA NOW


Russians love food and it looks like they finally have it too easy. Store shelves are full of every- thing from sausage to sushi, grocery stores offer take out and fast food joints can be found on every corner. But there’s a catch: Thirty eight percent of Moscow’s population is clini- cally overweight, and diabetes and heart disease are ram- pant. Russians have started to think seriously about what they’re eating.


“Excess weight was making


my heart like a body-builder’s biceps. The doctors said that if I didn’t start to lose weight immediately it might not hold out,” said Ivan Butman, a for- mer sportsman and now head of a department at a medium- sized Moscow bank. “When my heart problems started I had to switch to low-fat prod- ucts.”


Butman is not alone: Almost


half of deaths in Russia are due to heart attacks, and 37 per- cent to strokes. According to the World Health Organization, 9.6 million people in Russia today are suffering from Type 1 diabetes, due in large part to unhealthy lifestyles. Attitudes are slowly chang-


ing: About half of Russia’s pop- ulation has started buying or- ganic products, according to research carried out by the Nielsen company in autumn 2009. Pre-packaged salads, yo- gurts and dairy products with near-zero fat content now ap-


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Lifestyle Is the Russian market ready for healthy alternatives? Health Food on the Horizon


get a hold of ecologically safe produce in Russia. We tell them what it is, where you can find it, what ecological labelling on this kind of produce looks like, which brands can be trusted and why,” Galechyan said. Russians also like to grow their


own food locally, and often do so at their dacha. This too can offer a form of healthy living. Produce from the local markets or rinok may not be organic, but the food, fruits and vege- tables from Armenia to Uzbeki- stan is certainly a healthy alter- native to the foreign-brand frozen foods at the grocery stores. Some of the unhealthy food, and most of the fast food that has come into Russia over the past 20 years, can be traced back to the United States. Mos- cow has a McDonald's on every corner, with the occasional KFC.


The Russian Consumers’ Unhealthy eating habits and a surge of foreign fast food joints have led to an obesity epedemic in Russia.


pear in Moscow’s hypermar- kets. “In the morning I now eat


only yogurts, which I buy after work. Of course, that means I’m spending more on food,” Butman added. Andrei Khodus, director of


the Non-Commercial Partner- ship on the Development of Organic and Bio-Dynamic Farming, describes the market as being in its infancy. “Healthy food is less profitable than un- healthy food, but it’s still prof- itable,” noted Lidiya Seryogina, founder of the Seregina.ru com- pany.


Khodus said that a growing number of Russian manufactur- ers are gradually beginning to emerge on the Russian healthy food market. “The demand for imported bio-products is down, but the demand for Russian- made ones is up. As a result, Russian production of bio-prod- ucts for the domestic markets is also growing,” he said. According to the Institute for Biological Agriculture, the mar- ket for biologically pure food products in Russia still amounts to a very modest sum—60 mil- lion euros. “We should note the currently popular effect of pass-


Lifestyle A green thumb in gritty Moscow Plotting Urban Gardens


A group of Muscovites are planting vegetable gardens in a former industrial zone near Kursky Station, not far from the Kremlin.


MARIA ANTONOVA THE MOSCOW TIMES


First lady Michelle Obama plant- ed an organic vegetable garden next to the White House last spring to raise awareness about healthy eating. Now a group of Moscow gardeners and foodies hope to get across the message of growing food locally while reclaiming a former industrial zone near Kursky Station. The project offers urbanites a chance to tend their own greens. This month, enthusiasts


opened the Ogorod garden, 24 small plots sitting side by side in an area on the periphery of the old Arma gas factory on Ni- zhny Susalny Alley. Although there has not been any heavy industry in the factory area since 2002, the space around the red- brick 19th-century buildings re- mains underused and some- what gloomy. “The idea of reclaiming fac-


tory space and turning it into a garden really appealed to us,” said Boris Akimov, a food aficio- nado who runs Lavka Yeda, a company that takes and deliv- ers people’s orders for meat, dairy and other country food produced by small farmers. Lavka Yeda, which has an of-


fice on the Arma territory, rent- ed the land for the Ogorod gar- den and has already rented out 14 plots. Each plot is a bed measuring


2 meters by 0.7 meters, and costs 1,000 rubles ($33) per month to rent. For 2,000 ru- bles, or $66 dollars, Ogorod em- ployees will water the plot daily, and for 5,000 rubles the tenant


ing off ordinary products as ‘healthy,' and the appearance of words like eco-, bio-, natural and so on, which enable the manu- facturer to bump up the price,” Seryogina added. “The manu- facturers make lots of claims, which are aimed most of all at increasing profits; no precise cri- teria that are adopted by every- one have been established,” An- drei Khodus said. In some sectors, the amount of “phony healthy food” is as high as 60-70 per- cent of the market. Indeed, you don’t find a line forming in the Bio-Market chain’s organic produce shops,


even though Bio-Market is the only such chain in Russia. Bio- Market shops are part of the Organic Corporation, which be- longs to Nikolai Tsvetkov, owner of Uralsib, one of the country’s largest banks. He first got in- volved in selling ecologically pure products in 2005. His proj- ect is still scarcely profitable, noted Yelena Komkova, a con- sultant with SERVICEMAN Train- ing & Consulting. As more truly healthy food is available, that may change. “We are receiving more and more inquiries, by email and by phone, asking where people can


Rights Inspection—the Russian federal inspection agency for protecting consumers' rights and health—intends to estab- lish norms and principles for healthy food by as early as the end of this summer, which will give manufacturers and con- sumers the necessary guidelines and will help to strengthen trust in “healthy” products. And the potential is there: in


the United States, the market for packaged produce labeled “organic” grew by 19.3 per- cent in 2007, and by 9.4 per- cent in 2008. Russia, where healthy lifestyles are just becom- ing popular, will inevitably fol- low suit. “It’s true to say that in the


end I realized you cannot solve the problem of excess weight just by changing the quality of your food. You have to change your way of life,” Butman added.


MICEX.RU


up on a trend of organic food that “began in the West already 10 years ago” and make people approach their food choices with more responsibility. Michelle Obama’s decision to


turn the White House South Lawn into an organic garden last spring was a move to encour- age healthful eating and sustain- ability and earned praise from nutritionists and worried par- ents.


The Arma factory is a vast ter-


ritory that was built as a gas streetlight enterprise in 1865 and made gas equipment in the So- viet era. Industrial capacities moved out in 2002, and the space is currently rented out to dozens of firms, including Lavka. “They support us,” Akimov said of Arma’s owners. “They want the space to be developed cre- atively.” The garden sits against the far


The location around the Arma factory—which is no longer functioning—has become home to a garden plot business in downtown Moscow.


“Any apple you buy at the supermarket receives pesticide sprays, which are poisonous.”


does not need to do any work and can monitor the plot on- line “from any corner of the world,” Akimov said. Nobody has requested the


deluxe treatment yet. “Tenants who consistently neglect their plots will be kicked out,” said Lilia Dzhebisashvili, who is the garden’s coordinator. Since the small plots are close together, people will not be al- lowed to grow plants like pump- kins or squash, which require


space. Cannabis is also not al- lowed—“only things that are legal,” Dzhebisashvili said. “We plan to add another 300


square meters eventually, and if the city gardening idea catch- es on, we’ll expand to another area,” she said. The garden will not make any


money from the plots but hopes to turn a small profit by offer- ing various gardening work- shops and other events. “Some people often don’t


even know where food comes from and what it looks like be- fore it hits the stores,” said Mikhail Vorobyov, who will act as a consultant for gardeners who lack green thumbs. Voroby- ov also hosts two radio shows about dachas and gardens. Akimov said he hopes to pick


wall of Arma, next to an empty plot with some construction de- bris that is rumored to soon be- come a tennis court. The gar- den’s founders had to buy topsoil through an intermediary that is licensed through the Mos- cow city government. While most plots were empty


Wednesday, some had rows of lettuce, tomatoes and other greens planted for Lavka’s own use. Plants can be ordered from a partner of the project, Mosk- ovsky Agroholding. Vorobyov dismissed fears of pollution. “Any apple you buy at a supermarket might be grown far from the city, but it receives chemical pesticide sprays, many of which are poi- sonous,” he said. His confidence didn’t sway Po-


lina Kozlovskaya, a journalist who decided to get a plot since she does not have a dacha where she can garden. “I am going to plant medici-


nal herbs,” she said. “But I wouldn’t plant tomatoes here in the center of Moscow.”


Previously published in The Moscow Times


Banking The crisis has popularized gold accounts in banks


In Hundreds or in Bricks


Leading Russian commercial bank Uralsib has revived a strategy, accounts in gold, which aims to profit from mounting fear of a second crisis.


TIM GOSLING SPECIAL TO RUSSIA NOW


The price of gold has soared to record highs of more than $1,200 per ounce as investors flock to this traditional safe haven. At the end of May, Ura- lSib Bank launched new accounts in which cash is automatically converted into precious metals, including gold and silver. “A time deposit in precious


metals is interesting to deposi- tors who prefer to diversify their savings,” said Ilya Filatov, dep- uty chairman of the UralSib board, in a recent interview. "We made sure of this when we launched the product in Mos- cow, Ufa and St. Petersburg. That pilot product proved a suc- cess. A deposit in precious met- als doesn’t depend on exchange fluctuations and protects funds from inflation." The price of gold has been


rising steadily, from a low of about $900 in July 2009 to reach a peak of $1210 in the first week of May. That is dou- ble its price of $650 before the crisis in 2007. Some analysts be- lieve that the gold market is in danger of developing a bubble, but with both the euro and the dollar under threat from mas- sive sovereign debt and high deficits in most of the world’s leading economies, no curren- cy seems especially safe at the moment. Likewise, the ruble remains


vulnerable to changes in the oil price. During the worst of the crisis, oil fell from previous highs of over $140 per barrel to just under $40 in a matter of months, forcing the Russian government to spend over $200 billion in a controlled devalua- tion that wiped some 30 per- cent off the ruble’s value. “Investors have rushed back


into gold in a move that resem- bles the scramble we witnessed last autumn [when the crisis struck],” said Andrey Kryuchen- kov, a commodities analyst with VTB Capital in Moscow. “Glob- al risk aversion has triggered heavy losses across most com- modity and equity markets. But euro-denominated gold reached a fresh all-time high as the panic struck.”


Standard & Poor’s deposito-


ry receipts gold trust reported that gold holdings have surged to a new record high. As one of the world’s major producers, this flight to gold is benefiting Russia more than most. The country’s biggest producer, Polyus Gold, has been steadily increasing production, and re- cently expanded into Central Asia by purchasing Kazakhgold. Likewise, Petropavlovsk, Russia’s third largest gold mine, part- owned by British entrepreneur Peter Hambro, raised $50 mil- lion in February to fund further expansion. “Gold is a counter cyclical commodity, so when things are most uncertain, the future of gold producers is the most se- cure,” said Peter Hambro, chair- man of Petropavlovsk, one of Russia’s largest gold produc- ers.


Russia will play a key role in Europe’s recovery as one of the few engines of growth on the Continent in the near term, the World Bank said in a June 10 report. Russia together with Turkey


will make up just under two thirds of all growth in the re- gion this year. Russia’s growth is already accelerating as it emerges from the crisis. Rus- sia’s economy is expected to grow by 5.3 percent in the second quarter of this year, ac- cording to Russian investment bank Renaissance Capital.


Russia Now World’s Leading Oil Producer


Russia has overtaken Saudi Ara- bia to become the world’s big- gest producer of oil, leading daily Kommersant reported. However, at the same time, the country was toppled from its leading role in gas produc- tion.


Quoting BP’s 2009 annual


fuel and energy report, the newspaper wrote that global oil consumption saw its stron- gest decline since 1982. Still, Russia increased its oil


output 1.5 percent through the year, while Saudi Arabia dropped production by 10.6 percent. The United States re- mains the third biggest pro- ducer in the world, and in- creased output 7 percent in 2009.


Overall, OPEC countries cut


output by 7.3 percent, as the organization tried to stem pro- duction in order to support prices, which dropped to $40 at times during 2009. However, Russia fell from its


top spot in gas production, with the Saudis taking over, and is unlikely to take back its crown in the near future, as European demand is unlikely to revive.


BUSINESS IN BRIEF


Football Invest- ments on the Agenda


Russia will spend around $340 million on new stadiums across the country as it looks to win the right to host the 2018 World Cup, the country’s foot- ball chief said on Tuesday. “We have handed over our bid book for the 2018 World Cup to FIFA,” Russian Football Union head Sergei Fursenko said on the Rossiya 24 TV chan- nel.


“Sufficient funds have been allocated by the government for the reconstruction of ex- isting bases, pitches and infra- structure,” he said. “Around 340 million until 2015 is ex- pected to be spent on these needs.” He added that 13 new stadiums would be built for the tournament, and that even if Russia was unsuccessful in its bid, “we will build six sta- diums in any case.” Russia is competing with England, Australia, the United States, Spain, Portugal, Bel- gium and the Netherlands to host the World Cup in 2018 or 2022. Japan, South Korea and Qatar are bidding just for the second tournament. FIFA will appoint hosts for


2018 and 2022 World Cups on December 2. The 2018 tournament is expected to be given to a European bidder; the 2022 event would be held on a different continent.


Driver of Europe’s Recovery


us@rbth.ru rbth.ru/letters


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