The New Zealand goods still lining Russian supermarket shelves

With summer approaching in the Russian Capital, Muscovites can find a surprising number of Kiwi-supplied picnic staples still on supermarket shelves.

Azbuka Vkusa, a supermarket chain in the country, still stocks products including Westpac brand frozen half shell mussels, Cloudy Bay pinot noir, goat milk infant formula and some Sistema plastic containers to pack them in.

The New Zealand government joined much of the international community in trade restrictions on imports to and exports from the Pariah nation in retaliation for Russia’s illegal invasion and occupation of Ukraine

Luxury goods such as wine and some shellfish are banned from export, all Russian goods have been slapped with a 35% tariff and some goods from the country, like fuels and metals, have been banned outright.

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Yet a range of kiwi goods remain on sale in Russia with much stock from pre-invasion exports and some exempt from restrictions.

At Lenta, one of Russia’s largest grocery retailers, a bottle of 2017 Ned Marlborough Sauvignon Blanc retails for 899 rubles, equivalent to roughly $20NZD.

Russian online wine merchant Winestyle retails a bottle of 2022 Takā Sauvignon Blanc for the discounted price of 1397 rubles ($30NZD).

A spokesperson for Spring Creek Vinters who oversee the production of Takā wine, said that the last export of wine to Russia shipped on September 23, 2022. This export is not in violation of the luxury goods export restrictions which came into effect November 4.

This is the case for Cloudy Bay too, who are owned by French multinational LVMH and issued a statement via email.

“We are a subsidiary of the LVMH group which has not shipped to Russia since March 2022.

“Any Cloudy Bay products currently for sale in Russia were shipped there prior to the Russian invasion of Ukraine and Cloudy Bay has no plans to resume exports or sales to Russia.”

As in the case of Cloudy Bay, most of the goods appear to have been exported some time ago. With the exception infant goat milk formula which appears on the Stats NZ complied lists of exported products in December and January, alongside “raw hides and skins (other than furskins) and leather.”

Mussels have been banned for export since November. But asked when the last export of mussels was; Westpac mussels, whose frozen product is still available in Russian supermarket chain Azbuka Vkusa, declined to comment.

Sistema have also been approached for comment.

Even before the outbreak of the war New Zealand companies were small players in the Russian market.

Data from 2014, the year of the annexation of Crimea, had trade to the country from New Zealand at $240mil. Until then, negotiations between New Zealand and Russia alongside their then customs union partners, Belarus and Kazakhstan were ongoing.

Of the $1.8 million of exports to Russia in January this year, the most recent set of data to date, almost all consisted of exports of goat milk infant formula.

Dairy Goat Cooperative, the company that produce the formula, CEO David Hemara, said that the board of the company had thought “carefully” about continuing to sell into the Russian market.

“Unfortunately, goat milk infant formula is difficult to replace for infants who cannot tolerate traditional lactose formulas.”

Hemara said that the company serves both the Ukrainian and Russian markets and ultimately the issue is one of nutrition.

The definition of a luxury good might also surprise Kiwis. Everything from rare postage stamps to precious jewels are included. The list includes some 50 different categories of goods that are banned outright.

According to a Customs spokesperson, no recorded breaches of the sanctions have taken place to date.

While the trade measures New Zealand has taken against Russia remain comparatively slight by global standards, University of Waikato professor of law, Dr Alexander Gillespie says they were meaningful when considered together with others’ efforts.

The “importance isn’t the financial aspect but the symbolic aspect about being part of a wider coalition disapproving or what’s doing it,” Gillespie said.

There is still debate whether sanctions taken broadly are having a tangible impact on the Russian economy which is one of the world’s largest exporters of fuels and minerals, Gillespie says.

“Whether those sanctions are having an effect on Russia is a debate, it’s certainly slowing their economy down, but nowhere near as much as people thought it would do. They have repositioned themselves for other trade avenues like with China, India and Africa.”

Those companies who are above board but still choose to trade with Russia ought to be aware of “reputational damage if they continue to trade in these markets. Even if it’s legal it may be unethical.”

That said, Gillespie describes the reaction of Kiwi consumers to seeing images of New Zealand wine lining supermarket shelves but exported before sanctions, as likely “commonsense”.

Ultimately, Gillespie says the ends must match the means.

“Escalate. We have to find a way to end this war. Tariffs could be increased to 50% and the list of luxury goods expanded.”