Are There any Replacements for Coca-Cola and IKEA on Russian Market?

Are There any Replacements for Coca-Cola and IKEA on Russian Market?

Photo: https://gazetapik.ru/

Coca-Cola HBC has officially announced its withdrawal from the Russian market, according to media reports. The sale of beverages under this brand will be stopped. The day before, Swedish company IKEA also announced that it was leaving the Russian market.

What will happen to the employees of these companies, the production facilities, and the goods in the warehouses?

The official distributor of Coca-Cola HBC in Russia has announced that it is suspending the production and sale of the brand's beverages in our country. Such drinks as Sprite, Burn, Fanta, BonAgua, and Rich juice will not be available at the store shelves soon either. Currently, the stocks of drinks are being sold off. In Russia, Coca-Cola also produced and sold My Family, Dobry, and other juices.

Coca-Cola had 10 plants with more than 7,000 employees in Russia. According to BFM.ru, each job position in this company provided a job to 9 people who were customers and suppliers of these products. The company's website also says that during its cooperation with Russia, the company spent 5.5 million dollars on the social sector of the country.

Dina Grigolaya, CEO of the Orchestra Group consulting company, cited by Lenta.ru, said that the Russian market has already adjusted to the sanction pressure from the US and Western countries. Producers have stocks that will provide an opportunity to provide the necessary volume of goods on the shelves of stores for the summer, when there is traditionally a high demand for drinks.

Back in March, Coca-Cola suspended its business in Russia. At that time, it was a question of stopping further investment both in new production and in marketing. It was from that time that domestic producers began to look for opportunities to produce analogues of these products. According to media reports, citing a statement by Georgy Filimonov, deputy chairman of the Moscow regional government, Megapack began producing soft drinks under the Funky Monkey brand n the Moscow region, with a retail price 10-15% lower than its imported counterparts. Earlier, the Moscow beer and soft drinks factory Ochakovo started producing carbonated water under the names Street, Fancy and CoolCola.

At the same time, experts say that Russian specialists will be able to set up the production of a beverage that is not 100 percent identical, but close in taste to the popular Coca-Cola beverage. According to experts, the secret lies only in the flavoring composition, and the rest of the composition of this drink is quite simple.

Thus, Alexander Martynov, the founder of the Rovestnik bar said that “the taste of Coca-Cola is unique,” but they are trying to find an alternative, using different tonics, change the formula of some cocktails. It turns out that domestic producers are looking for different options to replace the products that are leaving the Russian market, and that's encouraging.

The day before, the Swedish company IKEA announced its withdrawal from the Russian market, as Business Online writes. The company decided to sell the remainder of the goods in its warehouses to employees and customers online. IKEA declared that it will sell four Russian furniture factories that belong to it. It was IKEA that was one of the first to suspend its business in Russia after the start of the Russian special military operation in Ukraine. Back in March, the company announced the closure of all 17 stores located in Russia. As a result, the Povolzhsky Plywood and Furniture Plant stopped producing stools for IKEA. The company started producing other furniture products on the vacated facilities.

When selling its enterprises, IKEA will give preference to those who intend to keep both the volume of production and the number of employees.

According to Business Online, experts have already made an estimate of the aggregate value of the four Russian plants that the company plans to sell.

IKEA enterprises may be put up for sale for 15 billion rubles ($293.21.) The Leningrad region, for example, is already looking for an investor who will be able to purchase IKEA Industry Tikhvin. Dmitry Yalov, deputy chairman of the regional government on economy and investments, said that Russian businessmen already have requests. In the Kirov region, the authorities will also monitor the further operation of IKEA Industry Vyatka. The press service of the governor of the region has already said that the downsized employees of the company will be helped with job placement. The domestic company Hoff, a competitor of Swedish IKEA, has already made the announcement that it is ready to discuss the possibility of purchasing the production facilities as well as lease of retail premises. In addition, the Tvoi Dom retail chain announced its intention to purchase part of IKEA's Russian assets.

Earlier, as Lenta.ru writes, Vladimir Putin, speaking about the departure of Western companies from the Russian market, said that domestic enterprises will occupy this niche. At the same time, the Russian President inderlined that import substitution is not a magic pill, Russia does not intend to do only with it, and our country will develop as a whole.

In March, it was suggested to nationalize those Western enterprises that are leaving the Russian market. It was emphasized that this decision on the part of foreign companies was made purely for political reasons.

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