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Moscow retaliated to a string of Western sanctions last year by imposing a ban on European agricultural products, but one of France’s best-known canned vegetable firms has since seen its profit margins soar in Russia.
Europe’s agriculture sector reacted with alarm in August 2014, when Russian Prime Minister Dmitry Medvedev signed a law banning imports of EU vegetables and fruit for a minimum of one year.
The Russian restrictions, which also targeted North American countries and included a wide range of food products, came after the West slapped sanctions on Russia for its role in the conflict in eastern Ukraine.
But at least one leading French vegetable producer has not become collateral damage in the commercial tit-for-tat.
In fact, business is booming, according to Bonduelle’s bi-annual report to shareholders, published this week.
The company, specialised in canned and frozen vegetables, said it saw a record year with profits soaring above the 1-billion-euro mark, thanks largely to “strong sales growth in Russia and the American continent”.
Canning the embargo
Bonduelle executives say the surprising figures in Russia are the result of several factors.
“Canned goods are exempt from the Russian embargo, for reasons that are completely foreign to us,” Grégory Sanson, the group’s Chief Financial Officer, told FRANCE 24 by telephone.
Furthermore, Sanson said three-quarters of the canned vegetables the company sells in Russia are produced locally, further shielding it from protectionist measures.
“We have two factories in southern Russia, near the Black Sea. They produce about 100,000 tonnes of vegetables and cover around 75 percent of the Russian market,” he said.
The CFO is happy to highlight the strong bonds between the company and the Russian market, even amid simmering tensions between the West and Moscow.
“We are very integrated in the Russian environment. We employ Russians in our canning plants, but also Russian farmers. We are considered a Russian company by both officials and by customers.”
Rather than suffering from the Ukrainian conflict and a volatile ruble, Sanson admits the period of instability is a boon for his firm. “Canned goods, which you can buy today and will be safe to eat in the future, are considered a safe bet during complicated times.”