Vladimir Putin, the self-proclaimed savior and protector of the Russian people, wherever they may be, has decided to punish the West by banning imports of food from Europe, Australia, and North America. Russian propaganda is busy convincing the Russian people that foregoing German yogurt, Italian strawberries, and even Big Macs is a small price to pay for Russian pride and the protection of ethnic Russians in east Ukraine, Moldova, and anywhere else they may be from rabid and homicidal Nazi thugs.
Putin may know his politics and may carry the Russian people along with his trade war, but his grasp of economics is deficient, to say the least.
Currently Russian consumers spend some thirty percent of their food budgets on imports. Any trip to a Russian supermarket features displays of familiar food brands – DANONE, Nestle, Pepsi, Dr. Oetker, and so on. Russian consumers buy these goods because they are affordable, offer reliable quality, and they are safe. They do not buy to make sure that German, French, Italian and Greek farmers make money. They buy because they like these products.
As these products disappear from the shelves, Putin promises they will be replaced by Chinese, Venezuelan, and Cuban products that are just as good. Putin’s promise can’t be met. If these substitute products from “friendly” nations were just as good, they’d already be on the shelves. (I’d recommend Russian consumers to stay away from Chinese baby formula). Moreover, it will take a while to strike the deals and work out the supply chains before these “friendly” products reach the shelves. In the meantime, food prices rise and shortages appear. Putin would say: A small price to pay for the restoration of Russian empire. I do not know if Russian consumers will agree.
The Western news media is already tallying the billions of dollars of costs French farmers and American cattle raisers face. No one thinks of tallying the costs to the Russian consumers, which are probably well in excess of the losses of the food producers from the unfriendly nations.
The Russian Internet is not stupid. It is full of pictures of empty grocery stores from Soviet times.
(Photo source: link)