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Predicting cross-border shopping boom

Store shelves in Murmansk Oblast, like here in Nikel, are still full, local residents say.

Finland and Norway can probably expect a boom of shoppers from Russia as store shelves in neighboring towns on the other sides of the the borders start to empty of foreign goods.

Location

The ban imposed by Prime Minister Medvedev last week does not affect commodities that Russian citizens purchase abroad for personal use, as long as they are in accordance with customs rules. You can bring a total of 5 kilos of vacuum-packed, processed meat products and frozen seafood as shrimps, as well as fruit, vegetables and dairy products.

Food products are allowed to bring into Russia through border-crossing points with veterinary control, like there is at Borisoglebsk on the Russian-Norwegian border, says First Deputy Head of Murmansk Customs Albert Duzhak to Komsomlskaya Pravda.

Russian shoppers have been coming to Kirkenes - the closest town to the border for several years, boosting local retail trade. In 2013 Russians shopped for some 130 million NOK (€15,4 million) on the Norwegian side of the border. And this is only retail sales. Russians stand for 15 percent of the retail shopping in Sør-Varanger municipality. In certain shops they account for as much as 60-70 percent.

Retail sales in Sør-Varanger municipality rose 20 percent from 2008 to 2012 - from 1 billion NOK to 1,2 billion NOK (from €118 to €141 million), according to numbers from Statistics Norway. This was the largest increase in the whole of Finnmark county.

No empty shelves yet in Murmansk
Six days after Russia imposed heavy restrictions on imports of food from the EU, US, Norway and a few other countries, foreign food is still in abundance in shops in Murmansk.

“Everything is pretty calm in the shops here,” says Murmansk journalist Anna Kireeva to BarentsObserver. “I don’t see any change. There are lots of salmon, foreign cheese and so on, no empty shelves and no lines of people trying to buy all the foreign food”. But it might not stay this way for very long, she says: “Many people are still away for the summer holiday and I guess the situation might change in a month or two.”

Finland hopes for Russian butter tourists
Also neighboring Finland is expecting to see more Russians in their shops in the near future. Juha Väätänen, a professor of international business at Lappeenranta University, predicts that Russian consumers will be the biggest losers from the counter measures imposed by the Kremlin.  

“Residents of Russia’s largest cities have become used to being able to buy western produce,” Väätänen claims. “When a large proportion of what’s available is suddenly cut, the breadth of choice will contract substantially,” he said. Väätänen estimates that the vastly reduced product lines could conversely lead to a boost for some areas of Finnish trade, if the measures push more middle-class Russians to make shopping trips over the border. 

”Some of the pent-up demand is very likely to manifest itself in increased travel to Finland,” he says to YLE.

Finland is trying to make it easier for Russian shoppers to find right dairy products, as the Finnish food safety authority Evira has decided that packages for milk and cheese will be labelled in Russian language in addition to Finnish and Swedish, Ilta-Sanomat reports. Evira’s goal is to avoid food wastage as a result of Russia’s ban on imports of food from the EU. Because of the embargo, Finnish producers of dairy products have been left with huge stocks.

Finnish dairy products accounted for about 87 percent of the country’s food exports to Russia. The value of the total food exports in 2013 amounted to €400 million.