Foreign direct investment as an agent of change in Russian agrifood business – consequences of the export of chain management concepts by foreign investors

Abstract

The internationalisation of food retailing and manufacturing that has swept through the agrifood system in industrialised countries is now moving into Russia. When retailers as well as processors enter a new country they face the challenge to build up their procurement and distribution systems. In this way modern management concepts are exported. This article analyses the influence of FDI on Russian agrifood business. First, we outline the features of Russian agrifood business describing the current situation. Second, we discuss FDI in Russian agrifood business. Third, we elaborate on the influence of FDI on Russian agrifood business at different stages (agricultural producers, food processing, food retailing including the fast food sector). We further discuss the future prospects of the Russian food sector.

Experiences of Danish Business Expatriates in Russia: Power Distance in Organizational Communication

“…However, Russia has the reputation as "a country with paradoxical realities … and [as] one of the most difficult markets to enter [due to its] weak legal system and an unpredictable economy" (Michailova, 2000, p. 99). Additionally, as Belaya and Hanf (2010), point out, Russian culture differs significantly from many western cultures. This is one of the reasons why many western managers and their Russian counterparts often have strikingly different attitudes towards similar situations.…”

“…The steady economic growth and the remarkable spending habits of the Russian consumers can create opportunities for successful business development in the country and may help attract many foreign investors (Belaya & Hanf, 2010). However, Russia has the reputation as "a country with paradoxical realities … and [as] one of the most difficult markets to enter [due to its] weak legal system and an unpredictable economy" (Michailova, 2000, p. 99).…”

Exporting to Russia? Entry barriers for food suppliers in a territory in transition

“…Alteration of federal trade law in Russia has gradually led Russian retailers to change their assortment strategy and also to decrease the number of suppliers they work with (Kolchevnikova, 2011). Belaya and Hanf (2010) stress that Russian retailers currently try to concentrate their sourcing of food products with larger Russian suppliers, but point out that this change is emerging only partially. Retailers are often forced in practice to work with many smaller suppliers, due to a lack of large wholesalers.…”

“…The Russian market has traditionally been one of the most important international markets for Central Asian businesses, but as this paper shows, it is becoming increasingly difficult for them to access and remain in this market. The Russian market itself is in the midst of a partial shift towards modern retail formats such as domestic and foreign supermarkets, hypermarkets, discounters and convenience stores, although a variety of other arrangements such as street markets and bazaars remain relatively important (Belaya and Hanf, 2010).…”

The dark and the bright side of power: implications for the management of business-to-business relationships

“…It is observed that by going abroad, retailers as well as branded food processors export their supply chain management concepts into new markets, both in the sense of enhanced efficiency and in the sense of global chain quality concepts. Due to the tightening of quality standards and the need to work together with suppliers, one of the main consequences is the establishment of tightly coordinated chain organizations (Belaya and Hanf 2010).…”