Table C. Definition of the Social Status of Customers at Moscow Stores White Collar 63.50%
Blue Collar 12.40%
Housewives 11.40%
Students 6.23%
Intelligentsia 0.38%
Pensioners 0.22%
Indigent 0.16%
Entrepreneurs 0.16%
No response 0.06%
The women polled judged the goods they bought by two sets of characteristics:
(a) Product perception:
information derived from advertisements opinion of acquaintances opinion of brand (have purchased it previously) (b) Physical characteristics: price freshness; manufacture and expiration dates calorie and nutritional content ecological purity external appeal country of manufacture brand name The most important characteristics of goods for the women polled were as follows: freshness - 71.88%, price - 56.8%, expiration date - 54.6%, vitamins, fats and so forth - 36.3%, ecological purity - 30%. 36% were concerned with the opinions of their acquaintances, and only 15% of customers were concerned with packaging. Thus, freshness, price, expiration dates and recommendations play the greatest role ininfluencing decisions to buy goods.

VII. Trends in the Food Marketing System

A major objective of the Russian government is to encourage the development of domestic sources of food products. Due to the inferior quality of Russian production equipment and methods, most Russians rightly assume that most food products produced abroad are of superior quality to those of Russian production. Foreign products are preferred by those who can afford them. Agrarian reform is a basic tenet of the government's program, with the primary goal being to create fundamental institutions of an effective market economy on the basis of private ownership of land and other means of production, development of entrepreneurial activities in the agrarian sector and establishment of conditions for attracting foreign investments.

The following conditions must be present in order to achieve this goal: creation of a normative legal basis for privatization of land; re-organization of collective and state farms on this basis and the creation of a broad network of farms as the basis for forming market structures in the spheres of production, processing and trading of foodstuffs.

Currently the tempo of agrarian reform has slowed down in Russia for the following reasons: a sharp decrease in volumes of investment in AIC development and their use. In 1993 only 2.5 trillion rubles was used out of the total volume of 4.1 trillion rubles budgeted; a slowing down in the pace of creating new farms and a reduction in the number of farms. On the average in 1993 14 farms out of each 100 newly-created collapsed, while in 1994 this indicator rose to 20 out of 100. In 1993 and 1994 more than 20,000 farms ceased operations due to rising difficulties with material and technical supplies and a worsening financial situation.

This resulted in the following negative effects: a decrease in production volumes for primary types of agriculture production in 1994 by an average of 15% compared to 1991; a decrease in production volumes for primary types of foods in 1994 by an average of 25% compared to 1991.

Compared to 1990 public consumption in 1994 of meat and meat products decreased by almost 30% and consumption of milk and dairy products decreased by 32%. If the disintegration of the food industry continues at the same pace over the next 3-4 years the level of agricultural production will have regressed to levels of 30 - 35 years ago. This will result in the drastic decrease in the quantities of domestic foodstuffs, increased dependence on imports, unemployment, curtailment of machine tool building etc. Russia still has a long way to go before achieving the classical understanding of a food market system. So far, only separate aspects have been formed which are not interconnected due to the absence of a precise normative and legal foundation and the reluctance of the Russian government to free up private production.

Currently the food market system in Russia includes the following elements: domestic manufacturers of agricultural production and foodstuffs; food importers; enterprises and organizations which engage in the purchase and sales of food, including federal and commercial structures which work together on the basis of general agreements, and independent commercial structures which engage in purchase and sales of food on an independent basis. A graphic illustration of this is the development of the food market system in Moscow. According to one of the directors of the Department for Food Resources in Moscow, the city currently receives food through three channels: from federal resources, through commercial structures (about 70) which have concluded general cooperation agreements with the Department, and through commercial structures which supply food on an independent basis. This multi-channel system works successfully; at least, there have been no serious interruptions in food supplies to Moscow in more than a year. The Moscow government has also established a special state enterprise called the Moscow Food Contract System which will conclude economic agreements, contracts, purchase food and "act in close conjunction with trade and wholesale enterprises throughout the city".

Importers have played a significant role in the formation of the food market system. A list of importers from the former Soviet republics and other countries is provided in the Appendices along with a description of import structure.

An analysis of data in shows that import covers virtually the entire assortment of foodstuffs and initiates from all the continents; however, Europe holds the leading position in both volumes and variety of food import.

As for development prospects for the food market system the following should be noted: namely, the future of this system depends a great deal on the effectiveness of land reform, the pace of land redistribution to the private sector and the development of a material and technological foundation for the food industry and investments. Specific measures for the purpose of developing the food market system are set out in Decision No. 638 of the Government of the Russian Federation (dated August 27, 1992) which states that from 1993 investment funds shall be allocated from the federal budget for the realization of the following federal programs: "Sugar", "Vegetable Oil", "Baby Food", "Salt", "Rebirth of Russian Villages and the Development of the AIC". In actuality, financing of these programs in 1993 consisted of only 41% of the 1992 financing.

According to specialists and independent experts the future of the food market system will depend more on the activity of independent commercial structures and private organizations than on the activity of federal bodies. Experience of the past two years has confirmed this hypothesis. Independent commercial structures are more active in the market, have a greater effectiveness, and most importantly, they are closer to the market and the consumer, thus having a better opportunity to study consumer interests and to find the necessary (according to demand) suppliers of food both in Russia, the CIS and abroad. Another important factor in favor of independent commercial structures is that they possess adequate financial resources.

Thus, as we can see, the future of the food market system will be defined not only by federal bodies but also by private independent commercial structures. Confirmation of this can be found in extracts of the current Prime Minister, Viktor Chernomyrdin's, speech "Primary Tasks of Government Foreign Economic Activity Policy" which provides for the following to occur with foreign countries:

assistance in the structural rebuilding process and support of domestic manufacturers by way of regulation of foreign competition on the domestic market; assistance placing foreign orders at domestic enterprises; protection of the interests of domestic exporters in foreign markets; assistance in the development of international cooperation between Russian enterprises and foreign firms to produce export-oriented machine tools, equipment and food which will be competitive on the markets; The decrease of grain and other food imports, the demand for which should be satisfied by domestic producers.

And with CIS countries: development of production cooperation and direct ties between enterprises, sectors and regions in the near abroad which would provide the necessary government support to these processes; unification of tax policies; establishment of preferential treatment for using currency funds received from sales of goods and services under agreements for industrial cooperation; convergence of national legislation norms regulating cooperative and direct ties between enterprises and sectors; achievement of the eventual elimination of current tariff and non-tariff restrictions on mutual trade, creation of a Customs Union within the CIS which will provide for the free movement of goods, work and services in a common customs zone. This will help form a common market in the CIS for goods, services, capital and work force. These measures shall undoubtedly play an important role in establishing a food market system in Russia and shall guarantee its integration into a food system with the former republics and foreign countries.

VIII. Appendices & Tables

Appendix 1, Table 1.1, Some Rates of Customs Duties
Brief Goods Description
Rate of Duty (as % of Customs Value or in ECU)
Turned milk and cream, yogurt, kefir and other fermented or curdled milk and cream, concentrated or unconcentrated, with or without added sugar or other sweeteners and aromas, with or without added fruit, nuts or cocoa 10
Butter and other milk fats 15
Carrots, turnips, beets, celery root and other root vegetables, fresh or refrigerated 10
Cucumbers and cornichons, fresh or refrigerated no duty
Animal and vegetable fats and oils; separated products; prepared cooking fats; animal or vegetable waxes 5
White sugar 20
Water, including natural or artificial mineral water or carbonated water free of added sugar, sweeteners or aromas; ice and snow 10
Coffee, tea, Paraguay tea and spices no duty
Sausages and similar meat products, meat subproducts or blood; foods made from those ingredients 20
Products made from cereals, flour, starch and milk; baked goods 15
Baby food. no duty

Table 1.2 RATES OF EXCISE DUTY ON SPECIFIC TYPES OF GOODS BROUGHT INTO RUSSIA
(Extract from Appendix 1 to Order No. 388
of the State Customs Committee dated August 1, 1994)
Vodka 3.5 ECU/L Plum, pear or cherry alcohols, including liqueurs 3 ECU/L Fortified juices 30% Ethyl alcohol, non-denatured alcohol with an alcohol content of at least 80% 400%, but not less than 4 ECU/L Malt beer 0.3 ECU/L Wines, natural wines, fortified wines 0.5 ECU/L Sparkling wines 1 ECU/L Vermouth 1 ECU/L Other fermented beverages 0.5 ECU/L Whisky 5 ECU/L Rum and palm liquor 5 ECU/L Gin and juniper beverages 5 ECU/L Other hard liquors 5 ECU/L Table 1.3 LIST OF GOODS EXEMPTED FROM VALUED ADDED TAX UPON IMPORT INTO THE TERRITORY OF THE RUSSIAN FEDERATION (Extract from Appendix 1 to Order No.338 of the State Customs Committee dated August 1, 1994) GOODS CODE GOODS DESCRIPTION Group 1 Live animals Group 2 Meat and poultry meat products Group 3 Fish and shellfish, mollusks and other aquatic invertebrates Group 4 Milk and dairy products; chicken eggs; natural honey; animal products which are not listed in other categories 051000000 Gray ambergris, castoreum... 060210-060220; 060291000; 060299300 Other live plants (and their roots), cuttings, branches, mushroom spawn Group 7 Vegetables and some edible root vegetables and crops Group 8 Edible fruits and nuts; citrus and squash zest and skin Group 9 Coffee, tea, Paraguay tea and spices Group 10 Grains Group 11 Milling production; malt; starch; alant starch; wheat gluten Group 12 except for: 120300000, 120720, 120730, Oil seeds and fruits; other seeds, fruits and grains; 120799, 120930000, 120999 medicinal plants and plants for technological purposes; hay and fodder 1302 Juices and vegetable extracts; pectins, pectinates and pectates Group 15 Fats and animal or vegetable fats; lipolysis products; prepared edible fats; animal r vegetable waxes (except for goods classified as "for technical and industrial use, except for the production of foods for humans") Group 16 Products made from meat, fish or shellfish, mollusks or other aquatic invertebrates Group 17 Sugar and sugar confectionery Group 18 Cocoa and cocoa products Group 19 Products made from grain and cereals, flour, starch and milk; sweet baked goods Group 20 Products made from processed vegetables, fruits, or other vegetable parts Group 21 Other various foodstuffs 2201 Waters, including natural or artificial mineral waters, carbonated water, with or without added suga rs, sweeteners or aromas; ice and snow 2202 Waters, including mineral water and carbonated waters with added sugar or other sweetene rs or aromas; other non-alcoholic beverages, except for fruit or vegetable juices classified under goods position No. 2009 220430 Other grape-juices 220900 Vinegar and vinegar substitutes obtained from acetic acid Group 23 (except for 230700, 230910) Remainders and by-products from the food flavoring industry; prepared animal feed 250100 Salt (including table salt and denatured salt) and pure sodium chloride... Group 28 Products of organic compounds of precious and rare earth metals, radioactive elements or isotopes ( only for food, pharmaceutical and medicina purposes) Appendix 2 Table 2.1 Contact Information For Important Russian Organizations All-Russia Scientific Research Center of Certification Moscow, Russia tel: (095) 253-35-80 fax: - (095) 253-33-91 Department of Agricultural Veterinary Medicine Orlikov Pereulok 1/11 Moscow, Russia tel: (095) 207-64-61 -- Dr. Nikolai Igorevich Zhukov (095) 975-59-29 -- Mr. Viktor Ivanovich Koryagin fax: (095) 208-22-55 Ministry of Agriculture of the Russian Federation Varshavskoe Shosse 37 Moscow, Russia tel: (095) 114-45-96 fax: (095) 114-45-96 Moscow City Sanitary and Epidemiological Station Department of Food Hygiene Grafskii Pereulok 4/9 tel: (095) 287-34-91 fax: (095) 287-39-39 Moscow City Veterinary Association Mr. A.V. Ponomarev, Chief Doctor Ulitsa Rusakovskaya 1, building 3 tel: (095) 264-17-74 fax: (095) 264-15-23 Rostest-Moskva, Food Products Division Moscow, Russia tel: (095) 332-98-40 fax: (095) 124-99-96 Russian State Committee on Standardization, Metrology, and Certification (Gosstandart) Moscow, Russia tel: (095) 236-23-36 fax: (095) 236-62-31 SGS Testing Facilities New York, NY tel: (212) 809-7300 fax:(212) 797-8794 Table 2.2 Food Stuff Certification Departments in Moscow 1. Certification department "SOEXTEST" of the firm "TEST" of VO "SoyuzExpertiza" of the Chamber of Commerce and Industry of Russia Moscow, Russia tel.: (095) 299-56-06 fax: (095) 956-38-48 Moscow, Russia tel.: (095) 976-23-23 fax: (095) 976-34-13 7. Food Stuff and Forage Certification Department "Moscow PITSAS" Moscow, Russia tel.: (095) 591-95-78 Appendix 3 - Table 3.1 Import Structure (thous. tons) FOODS 1991 1992 1993 Meat products 799 444 125 Dairy products (for milk) 3,669 2,664 1,150 Butter 138 93.2 40.5 Including: Dry milk 67 51.4 - Vegetable oil 258.6 515 74.2 Raw sugar 1,570 2,060 1,440 Sugar - 1,554 - Cereals (except groats, mln tons) 18 24.06 10.4 Including: Wheat - 15.2 5.46 Barley - 3.095 0.55 Corn - 4.61 4.01 Fresh vegetables - 270 - Fruits and berries - 141 - Tea - 47 - Coffee 40.9 31.8 34.6 Flour - 944 - Table 3.2 Sources of Primary Foodstuffs Pastas Italy France Sweden Fish products Finland Sweden Germany China, USA Flour USA (soy) Sweden Yugoslavia Tea India (through Great Britain) Turkey Sugar cane Brazil (through the USA, Finland, France) Ukraine (through France) Dairy Products: Butter New Zealand France Germany USA Fats USA Ukraine Sugar beets France Ukraine Cheeses Switzerland Germany France UkraineConfectionery France Italy Germany Eastern Asia Denmark Yogurt France Germany Hungary Dry milk France Ukraine Vegetables and Fruits UAE New Zealand Netherlands China Ecuador Condensed milk Poland Ukraine Vegetable Oil Italy Ukraine Netherlands Poland USA  Canned and Frozen Vegetables and Fruits Hungary Bulgaria Netherlands Denmark Moldavia Coffee Brazil Cuba Ecuador India Meat Products: Frozen beef, pork Netherlands China Poultry USA Germany Sausages Denmark Sweden Cold drinks & juices USA Great Britain Poland Denmark Austria (beer) Netherlands France Processed meat products (canned) Poland China Ukraine Germany Denmark  Beer Denmark Austria Netherlands Sweden Germany Wines, cognac France Great Britain Netherlands USA Italy Hungary Armenia Georgia Belarus In Russia: Fish products Far East Cereals Stavropol and Krasnodar Territory, Saratov, Voronezh and Belgorod Provinces Vegetables & Fruits Western Russia Krasnodar Territory, Saratov, Voronezh, Belgorod and Tula Provinces  Table 3.3 Contact Information for Foreign Firms Which Export Foodstuffs to Russia Austria Steirerbrau Ag (beer) Representation: tel. 249-7277 fax 454-6202 Denmark Tulip Meat Packers -- manufacture and export frozen foods and canned meats tel 188-4427, 181-7256 fax 188-4481 Oxford Biscuits A/S -- confectionery, bread and baked goods, sugar Represented by Jahn International A.S. (Denmark) tel 188-4427, -4361, -7256, -7265 Sender: GUNN@USITA.GOV Date: Mon, 12 Feb 1996 07:47:27 -0500 From: Trevor Gunn To: GUNN@USITA.GOV Subject: Food Report: Russia fax 188-4481 Carlsberg A/S -- beer and non-alcoholic beverages Represented by Jahn International A.S. (Denmark) tel 188-4427, -4361, -7256, -7265 fax 188-4481 Tuborg Breweries Ltd. -- beer and non-alcoholic beverages Represented by Jahn International A.S. (Denmark) tel 188-4427, -4361, -7256, -7265 fax 188-4481 Finland Valio Oy -- Foodstuffs tel 230-2810, -1388 fax 230-2810 France Viscora -- sausage casings Represented by Compagnie Olivier tel 209-6692, -6705 fax 200-2256 Ramel, Les Fils de Henri -- wines Represented by E.R.C.I. tel 250-5549, 5571 fax 250-9744 S.g.g.S.d.M.F. -- soft drinks, carbonated flavored waters, Perrier mineral and drinking water) Represented by Merl tel 954-9012, -2203 fax 954-9022 Great Britain Devro Ltd. -- sausage casings tel 236-5446 fax 230-2190 International Distillers and Vintners Ltd. (IDV) -- alcoholic and non-alcoholic beverages tel 253-2540 fax 253-2540 Smirnoff, Pierre -- alcoholic beverages, Smirnoff vodka Represented by International Distillers & Vintners Ltd. tel 253-2540, 956-3513 fax 253-2540 India Bharat Forge Ltd. -- tea, coffee tel 283-4874 fax 283-4774 Italy Martini end Rossi SpA -- alcoholic beverages tel 253-1211 fax 253-9068 Netherlands Agrico -- raising, storage and processing of potatoes and vegetables tel 241-0414, 230-2115 fax 230-2115 Archer Daniels Midland Europe BV -- processing of agricultural raw materials- soy, cereals tel 243-1404, -9777 fax 243-4233, -1661 Heineken Brouwerijen BV -- beer, wine and hard liquor, non-alcoholic beverages Represented by Peja Holding NV tel 230-1986, -1987 fax 230-2891 New Zealand New Zealand Dairy Board Company -- manufactures and exports dairy products, meat. vegetables and fruits tel 133-5740, -5739, -5750 fax 230-2644 Sweden Juvel, Kvarm. och Bageri AB -- flour and pastas Represented by KF Procordia International AB tel 253-2980 fax 253-9068 Pripps Bryggeries AB -- cold drinks and beer Represented by KF Procordia International AB United States Cargill Inc. --manufactures and exports soy and rapeseed oils, glucose, wheat and corn starch, wheat gluten, soybean products, soy flour and soy powder tel 941-8278, -8373, -8203 fax 941-8260 Nabisco Brands Inc. -- flour, fats and oils, bread and baked goods tel 238-6085 fax 230-1364 Philip Morris Companies Inc. -- beer, non-alcoholic beverages tel 973-2432, -2431,-2435 Coca-Cola Co. -- soft drinks, instant coffee, tea Yugoslavia Centroprom -- manufactures and exports agricultural production and foodstuffs tel 284-5726 fax 975-2571 Table 3.4 The List of Major Firms Engaged in the Food Trade Firm Product Telephone Notes OLBI Wide assortment 282-6015 Have their own stores Menatep Chicken quarters, meat products, sugar 235-8719 NBM-Service Wideassortment 921-9464 Have a large store Victory Trading Chewing gum,chocolate, confectionery,foodstuffs 155-7608 Victor Market Full profile trade house 165-1883 Don't import on their own Trade and Credit Full profile trade house 207-4154 Chain of kiosks ELM Fruits and vegetables 519-2307 Chain of stores, restaurant Roscoffee Coffee 120-5581 120-6581 Major supplier of coffee Centaur (currently Association Centaur) Full profile trade house 447-3215 263-9943 One or morerestaurants Erlan Beer 430-9864 Samos Cold drinks 241-7079 Major supplier of cold drinks Tver-Pivo Domestic beer 193-6453 OTL Chocolate 111-7510 Cascade Full profile trade house 231-2319 Alina Int Group Full profile trade house 214-7109 TRY Coffee 266-1913 Markon Meat products 254-1226 Mobile 254-2251 Union Wide assortment 249-4597 Chain of stores Soyuz contract Softdrinks (majorsupplier 249-7600 Herschi (Neth.) Drinks, Meat products 249-4840, 240-4395 Transit-Market Smirnoff Vodka 212-1143 Parvin Coffee Major supplier 243-3370 SimexCoffee Major supplier 928-9041 Azimuth Plus Full profile trade house,wines 539-8205 Dessa Liqueurs 128-9810 Fortuna-100 Full profile trade house 928-7297 Nord Pilgrim Chocolate 475-4658, 275-1690 Titan-Moscow Coffee 924-7580 Gums Chewing gum 206-0609, 206-0690 TradeHouse"7" Full profile trade house 465-4859 Alexander Market Chocolate,confectionery 272-4871 Interfruit Fruits and vegetables 934-7100 Eksimer Foodstuffs, dairy products 939-0692 Centaur Softdrinks 284-3340 Nakhodka-Prize Softdrinks, trade house 171-6856, 171-4106 Dilan Confectionery 268-8133 Roditi Wide assortment,sugar 233-2165, 964-1130 Soyuzplodimport Coffee 244-1807 Sucden (Fr.) Sugar 244-1807 AKDGmbH Wide assortment 262-1946 Smirnoff Vodka 262-4561 Mi-Service Coffee 128-9093 M-Ross Dairy products 287-2401 Fobos Foodstuffs,confectionery 280-7590 Appendix 4 PRODUCTION OF PRIMARY FOODSTUFFS IN RUSSIA Table 4.1 Production of Agricultural Production in Russia (thous. tons) 1986-1990 1991 1992 1993 Cereal crops 10,426 89,094 106,855 98,931 Sugar beets 33,177 24,280 25,548 25,468 Potatoes 35,881 34,329 38,330 38,054 Oil crops, including: 4,050 3,820 3,882 3,445 Sunflower 3,121 2,896 3,110 2,753 Soy 645 622 505 506 Tea leaves 7.3 8.1 7.2 6.4 Fruits and Berries 2,603 2,165 2,822 2,732 Grapes 687 543 529 467 Vegetables 11,169 10,426 10,018 9,802 Livestock and poultry 9,671 9,375 8,260 7,680 Milk 54,218 51,971 47,236 46,097 Eggs (millions) 47,132 - 42,902 40,349 Table 4.2 Production of Foodstuffs in Russia (thous. tons) 1990 1991 1992 1993 Meat, including category 1 subproducts 5,894 4,933 3,800 3,173.9 Poultry 1,190 1,081 857.8 783.7 Sausage 2,242 2,029 1,482.5 1,423.6 Butter 830.1 723.9 742.4 697 Fatty cheeses 455.4 392.4 292.4 303.9 Whole milk 8,784.1 8,270.7 5,829.3 4,291.4 Sour cream 1,313 1,206 460 455 Curds 404 332 180 172 Granulated sugar 3,768 3,425 4,053 3,882 Flour, including: 18,418 18,387 17,590 14,839 Rye flour 2,123 2,227 2,164 1,691 Groats, including: 2,626 2,455 1,722 1,505 Buckwheat groats 173 196 113 109 Rice groats 480 426 242 198 Confectionery 2,845 2,618 1,809 1,741 Pastas 1,037 1,113 1,047 828 Vegetable oil 1,125 1,116 916 1,048 Mayonnaise 168 124 126 161 Vodka and hard liquors (mln gal) 137.6 153 151 155 Cognac (mln gal) 5.9 2.6 1.8 1.6 Grape wines (mln gal) 58.3 45.4 35 21 Champagne (mln gal) 7.8 7.4 7.6 8.6 Mineral water (mln half L) 864 714 425 296 Fish - 6,966 5,219 4,246 THE STATUS OF THE FOOD INDUSTRY IN RUSSIA Table 4.3 Status of Livestock Farming at Agricultural Enterprises Private_~ Unit of 1993 as measure 1990 1991 1992 1993 of 1990 Livestock and Poultry 000s tons sold for Slaughter live weight 11128.4 9530.1 7712.6 6632 59.6 Gross Milk Yield 000s tons 41306.3 37229.4 30801.3 28668.6 69.4 Milk yield per cow Kg 2784 2576 2245 2250 81 Number of Livestock and Poultry as at 1/1 000s head 45666.6 42312.9 38221.8 34501 75.5 Including: Cows 000s head 14888 14364 13082.5 12231 82 Pigs " " 27819 24414 20593 17878 64.3 Sheep and Goats " " 41390 37393 31768 25116 60.1 Poultry " " 457111 442469 371404 372000 81.4 Death of Livestock of any Age Cattle " " 1972 2195 2374 2500 127 Pigs " " 4999 5484 5958 5749 115 Sheep and Goats " " 5099 5423 5626 5173 101.4 Livestock Bought from the Public Cattle " " 3055 2119 1431 1032 34 Pigs " " 2344 1310 514 238 10.1 Sheep and Goats " " 1987 1175 802 388 19.5 Availability of all Types of Feed Expressed as Feed Units 000s tons 75077 57940 54898 53853 71.3 Concentrated Feed " " 19989 13878 17947 16274 81.4 Supply of Feed per Head of Cattle Centner 13.2 10.9 11.7 12.6 95.5 Table 4.4 Investment in the Food Industry (mlns rbls at 1993 prices) Private_~ Volume of Expenses Utilized Total Expenses Financial Capital Tools and Made Liability Investments Equipment Total for Committee of the Food Industry 136,547 24,018 116,626 140,644 86,836 The "Sugar" Program 20,180 9,183 15,048 24,231 159,996 The "Vegetable Oil" Program 11,582 2,478 11,849 14,327 7,125 The "Baby Food" Program 35,836 4,493 22,957 27,450 16,911 "Salt" 4,590 3,390 2,933 3,272 1,321 "Rebirth of Russian Villages and Development of the Agro- Industrial Complex 64,359 7,525 63,839 71,364 45,283 Appendix 5 Average PerCapita Consumption of Foodstuffs in Russia Table 5.1 Average Per Capita Consumption of 25 Basic Foods Type of Food Recommended Allowance Reported Allowance Reported by allowance by State Statistics Committee for the Food Industry (kg/year) (kg/year) Committee (kg/year) 1992 1993 Bread and cereal products, including: 110 131.6 109 109 1. Rye bread 68.7 2. Wheat bread 62.9 3. Wheat flour 19.5 4. Rice 3.7 5. Wheat 9.8 6. Pastas 5.2 Vegetables and squash, including: 139 218.2 202 202 7. Potatoes 117 124.2 119 119 8. Cabbage 28.1 9. Carrots 37.5 10. Other 28.4 83 83 11. Fruit 71 19.4 33 33 12. Sugar and confectionery 39 20.7 41 41 Meat and meat products, including: 78 26.7 58 54 13. Beef 8.4 14. Poultry 17.5 15. Boiled sausage 0.45 16. Smoked sausage 0.35 17. Fish products 23.3 11.7 13 13 Dairy products, including: 390 139.4 295 274 18. Milk 123.1 19. Sour cream and cream 1.6 20. Butter 2.5 21. Curds 9.9 22. Cheese and feta cheese 2.3 23. Eggs (by unit) 291 151.4 257 257 24. Margarine 3.9 25. Vegetable oil 13 6.4 6.7 6.3 The foods listed above make up the subsistence level. The State Statistics Committee and the Labor Ministry of the Russian Federation calculate the minimum consumer basket (78,000 rubles in October 1994) and other statistical information related to the public standard of living on a monthly basis based on the consumption of those foods and taking into account thestructure for the living minimum wage budget (Table 5.2). Table 5.2 The Budget Structure for the Average Living Minimum Wage in Russia (%) Item Per Capita Able-bodied persons Retired persons Children (under 15) Food 68.3 61.6 82.9 73.4 Non-food goods 19.1 21.4 10.0 19.8 Services 7.4 8.9 7.1 6.8 Taxes 5.2 8.1 - - Total Expenses 100 100 100 100 Appendix 6 Price Statistics for Various Products The Economic News Agency has developed price indices for exchange goods which makes it possible to evaluate the status of goods commodity markets, to determine the rate of price changes for leading goods and to determine the level of inflation at any given moment. Prices as at January 10, 1993 for 200 commodities which are regularly put in tenders at various Russian exchanges shall serve as the basis for comparison. Table 6.1 Price Indexation for Exchange Goods as at 10/11/94 General Index 11.7 Milk and cream 5.88 Butter and other dairy fats 5.84 Potatoes 3.59 Onions 29.10 Coffee 2.28 Tea 2.88 Rye 6.45 Barley 6.19 Rice 7.82 Starch 1.94 Ethyl spirits 4.45 Liqueurs, hard liquors 6.38

Table 6.2 Goods with the Greatest Appeal for Retail Trade (Sept-Oct)

Goods               Average Weekly       Liquidity Ratio   Average Profit   Good's Appeal
                      Retail Price                            Norm (%)          Factor
Drinks
Noor carbonated water (Belgium),1.5L        
                        2300                0.12               75              0.4
Bottled beer, 0.33L (Germany)               
                        1500                0.10               58              0.34
"Rasputin" vodka, 0.7L, (Germany)           
                        5300                0.13               46              0.30
Coca-Cola, 0.33L, (Germany)                 
                        1100                0.23               31              0.27
Confectionery
Chocolate                900                0.14               32              0.23
"Picnic" chocolate bars  800                0.14               29              0.22
Food
Cabbage rolls (Bulgaria),410g
                        2300                0.09               54              0.32
Ham (Netherlands), 200g                     
                        1800                0.06               52              0.29
Vegetable oil (Netherlands) 1L              
                        2900                0.08               43              0.26
Salami (Denmark), 400g                      
                        3600                0.13               35              0.24
Marinated peppers (Bulgaria), 700g          
                        2300                0.11               34              0.23

Arbat Irish House*                                                
Purchasing Department                                                         
Ul. Novy Arbat, 21                                                            
Moscow, Russian Federation                                                    
Tel. (7095) 291-2945                                                
Fax: (7095) 291-2997                                                          
Sadko Arcade Foodland                                             
Purchasing Department                                                         
Krasnopresnenskaya Nab, 12                                        
Moscow, Russian Federation                                                    
Tel. (7095) 253-9593                                                          
Fax: (7095) 973-2185                                            

Stockmann's                                                                
4/8 Zatsepskiy Val.                                                         
Moscow, Russian Federation                                                  
Tel/fax. (7095) 233-2602                                          

Lux                                                                        
Purchasing Department                                                         
Olympic Village                                                              
Moscow, Russian Federation                                                    
Tel.  (7095) 437-5449/6438/6641                                               
Fax:  (7095) 938-2164                                             

Virginia-American Food Store                                               
27/4 Malaya Bronnaya                                                          
Moscow, Russian Federation                                                    
Tel.  (7095) 290-3531                                                         
Fax (7095) 924-8339                                               

Garden Ring Supermarket                                                    
Ul. Bolshaya Sadovaya 1                                                       
Moscow, Russian Federation                                                    
Tel. (7095) 209-1572                                                          
Fax (7095) 250-8907