Profitable
Business
Putin Allies Poised to Profit on Russia's
Food Sanctions
Reuters
Dec. 29 2014 15:25
Last edited 15:26
Sergei
Karpukhin / ReutersBusinessman
Gennady Timchenko attends a session of the St. Petersburg International
Economic Forum 2014 (SPIEF 2014) in St. Petersburg in this May 24, 2014 file
photo.
ABINSK, Russia — As U.S. and European sanctions piled pressure
on Russia earlier this year, the Kremlin hit back with
an unusual weapon: apples.
From Aug. 7 Russia banned imports of fruit from various
countries that supported sanctions, including Poland, which has been
a strong critic of Russia's actions in Ukraine. The ban had
real impact: Poland is the world's biggest exporter of apples
and last year sent more than $380 million worth to Russia, according
to International Trade Center figures.
While Poland's apple growers are suffering, the ban has also been
an opportunity for an old friend of Russian President Vladimir
Putin.
A day after Russia decreed Polish apples forbidden, Gennady
Timchenko, who made a fortune from oil trading during Putin's years
in power, applied to buy a large stake in one
of Russia's biggest apple producers. Through his investment company Volga
Group, he now owns 40 percent of Alma Holding, which has orchards
in the Krasnodar region of southern Russia.
For Timchenko, 62, it is a chance both to profit
from a market suddenly in need of homegrown apples and to
support Russia in the face of Western sanctions. He portrays
the investment as a patriotic act, a show of support
for Putin, whom he has known since the 1990s, and of defiance
against U.S. and EU sanctions imposed on Russia over its meddling
in Ukraine.
"This is our first asset in agriculture. I am sure … it will
complement Volga's portfolio of initiatives to strengthen food
security," Timchenko said in a statement in October. "For
me it is not just business, it is part of the social mission of my
group."
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