Column by Anatoly Kostyrev about the legacy of transnational corporations

The replacement of transnational corporations that left the Russian market “has become a powerful incentive for our business,” President Vladimir Putin said at the SPIEF 2023 meeting. But often in practice such substitution is conditional. Even Russian companies that renounce their previous ties and conflict with foreign business cannot abandon their orientation to Western models.

The other day, the Telegram channel “Prosto Pro Beer” published the design of new Baltika drinks, which should probably replace the brands of the Danish Carlsberg Group. Bottles with the brands Tony’s Garret, Green Beat and Krone Blanche turned out to be so similar to Seth & Riley’s Garage, Tuborg Green and Kronenbourg Blanc that some commentators on the channel compared the new drinks to “Abibas sewing”.

After the transfer of Carlsberg’s shares in Baltika to the Federal Property Management Agency, the Danish group tried to deprive its Russian subsidiary of the rights to some of the brands, which led to a series of legal disputes. Baltika President Taimuraz Bolloev even called the nationalization of the company “the only way out” of the situation. In a letter to the Federal Property Management Agency, which was quoted by Vedomosti, Mr. Bolloev complained that the Danes were reducing the share of local brands in production, “reducing to zero” the production of a number of brands.

But, having moved on to business management, for some reason he is in no hurry to revive local brands. Although back in October 2023, Baltika announced a “return to roots” and the return of Baltika 3 according to the 1992 recipe.

Similar examples of launching new brands with references to well-known foreign and, most often, Western brands can easily be found in other markets. Thus, in 2023, the Russian distributor began producing the carbonated soft drink Dr.Pi, reminiscent of Dr.Pepper. Sellers of home goods like the Belarusian Swed House continue to follow the example of IKEA. Megamarket, which launched its Konda running shoe brand for the 2023 Moscow Marathon, was clearly inspired by the Japanese Hoka, and Russian clothing brands are sometimes positioned as brands with Korean designs.

Analysts today note the habit of Russian consumers to changes in assortment and willingness to try new products. But many manufacturers, apparently, are not interested in developing truly new products while they can take a simpler path. But the dominance of local products pretending to be well-known foreign brands can at some point become so boring that interest in new products will decrease, and the advantage will be the presence of an understandable local brand. According to NielsenIQ, the number of brands that make up 80% of beer sales has decreased over the past two years from 95 to 86 brands, and Baltika and Zhigulevskoye remain the most popular among consumers.