Russians love their tea, but they are also one of the largest importers of coffee in the world, behind the US, EU, and Japan. The initial challenges to importers came from shipping, with some merchant vessels intercepted as potentially in breach of sanctions.
Importers had to navigate through rapidly changing sanctions, coming from both the EU, the US and elsewhere. A number of traders attempted to redirect shipments that were originally bound for Russia or Ukraine to alternative ports.
However, not all trades could be salvaged, and as one Swiss-based trader put it – “Realistically these contracts will have to be voided. It’s as simple as that”.
Cargo shipments to and from Russia have been temporarily suspended by MSC, Maersk and CMA CGM, which represent the biggest shipping companies in the world.
Some western companies were quick to pull out of the Russian market in order to avoid the stigma of supporting an aggressive regime. Ukraine President Zelensky has been effective in communicating what he thinks of those companies that continue to do business in Russia. As Zelenski put it, “Values are more valuable than profits on blood.”
Good food. Good life.
Nestlé Slogan, quoted by President Zelenski
Yet, some companies like Nestle were initially reluctant to leave, that is until they were called out directly by President Zelensky.
“Good food. Good life.’ This is the slogan of Nestlé. Your company that refuses to leave Russia,” Zelensky said during a speech to the people of Switzerland. “Even now — when there are threats from Russia to other European countries. Not only to us. When there is even nuclear blackmail from Russia.”
Nestle has withdrawn a range of consumer products, including their Nespresso coffee, but continues to trade in more essential products such as baby milk formula and dog food.
Europe’s big consumer-facing companies have had a challenging time to plan a full-scale exit from the country. Nestlé has thousands of employees and sensitive manufacturing facilities, that risk seizure and recrimination by Russia if they fully disengage. Swiss luxury watch manufacturer Audemars Piguet discovered this last week when Russian agents seized millions of dollars worth of their most coveted watches in Moscow. The move was apparently a response to sanctions, according to Swiss newspaper NZZ am Sonntag.
While most of the coffee imported to the country is Robusta and turned into instant coffee, there are also the speciality coffee roasters who may have been trading directly. This group faces other challenges in addition to logistics. Even if a roaster can find a way to ship coffee into the country, the Rouble depreciation by 30% has made the cost commercially prohibitive.
