Are Condoms Next on Putin’s Import Hit List?
Russians are learning to live without imported cheese and other luxuries barred by Kremlin sanctions. But when reports surfaced this week that the government might ban condom imports, there was genuine alarm, including dire predictions of a spike in HIV/AIDS infections and unwanted pregnancies.
Nearly all condoms sold in Russia are foreign-made, a legacy of the Soviet era, when locally produced models were notoriously unreliable. “We don’t recommend using” Russian brands, the owner of a Moscow condom boutique told the magazine Sekret Firmy. “We sell them as balloons.”
Turns out the reports were misleading. The import ban, proposed by Russia’s Industry and Trade Ministry, would apply only to condoms and other medical devices purchased by state agencies, not to those sold to consumers by retailers. President Vladimir Putin hasn’t said whether he backs the idea. Questioned by local news media yesterday, Putin spokesman Dmitry Peskov said the Kremlin was unaware of the proposal.
Still, the reaction to the reports highlights the difficulty of reducing Russia’s reliance on imported goods, as Putin wants to do, in response to Western sanctions imposed on Russia after it annexed Crimea. “We have to use sanctions to move to a new level of development” by helping local industry produce more to replace imports, Putin said during his annual television call-in program in the spring.
Putin faces at least two challenges here.
Russians love imported goods, even though items from abroad have become far more expensive as the ruble’s value has fallen steeply in the past year. In a 2014 survey of Russian consumers, branding consultants Landor Associates found that a majority preferred foreign brands in almost every product category except food. From smartphones to cosmetics, “international brands continue to outperform Russian brands on every key metric in our survey except tradition,” the survey found.
Brand image isn’t the only problem. Russia manufactures little of what its people need, including some things that could save their lives. For example, while some local companies make heart defibrillators and medical scanners, the production is “very limited,” according to a spokeswoman for Medex, a Moscow-based company that imports those and other medical devices from Europe, the U.S., and Asia. GE Healthcare, of the U.S., has had a joint venture with a Russian firm since 2009 that locally manufactures some medical equipment, including ultrasound devices. A GE spokesman said the company also helps Russian medical professionals with training and maintenance of the equipment.
But getting Russian companies to build their own production capacity and technical expertise will require investment capital, something few have access to nowadays. Sanctions have locked Russia out of global capital markets, foreign investors have fled, and interest rates are punishingly high.
So even if Russians are relieved to learn they can still buy their imported condoms, efforts by the government to lock imports out of the country are no laughing matter.
(An earlier version of this article said Kremlin sanctions have banned imported wines. They haven’t.)
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.