Moscow: Russian coffee consumption has fallen by an estimated 30 per cent since the financial crisis sparked by currency devaluation last August and is not likely to pick up soon, industry executives said late on Thursday."The August crisis cut the market by 30 per cent. This will last not just for a month but for several years," Andrei Savchenko, sales director in Russia for Kraft Jacobs Suchard, part of Philip Morris, told a news briefing.He said his company estimated Russian consumption of all coffees at 45,000 tonnes per year before the crisis hit, although there were no accurate figures and the true total could be ten percent either side of that. Russian coffee consumption boomed after the break up of the Soviet Union, reflecting the emergence of a middle class with money to spend. "Where there's been a growth in consumption of coffee, it's almost always been associated with a period of economic growth," Michael Heath, Promotions Manager of the International Coffee Organisation, said.
"When peoplehave a choice over how to spend their money, coffee benefits," he added.
The Soviet Union started large scale imports of coffee in 1984-1985, at 5,000 to 7,000 tonnes per year, and this figure remained stable until around 1991, Bernard Meunier, commercial director of Nestle Food in Moscow, said."Through the 1990s until the crisis, consumption increased gradually and was still growing at the time of the crisis," he said. The biggest growth was between 1993 and 1996. He said the price rise in rouble terms caused by devaluation had led around 30 per cent of Russia's coffee drinkers to stop consuming altogether, while the remaining 70 per cent had cut down. A change in the import tariff regime may force prices even higher, he said."It seems soluble coffee has been withdrawn from a list of goods with duty preference tariffs from third world countries, this came out of the blue in January," he said.
"Tea and coffee beans remain on the list of duty preference items. This discriminates against soluble coffee,which is 95 per cent of all coffee consumed in Russia and will increase even more the price to the consumer," he added.
The International Coffee Organisation will hold a series of promotional events in Moscow in the spring to try and raise the profile of coffee in a primarily tea-drinking country. Meunier pointed out that Russia is a potentially attractive market for coffee. "A unique feature of Russia is the high incidence of coffee drinking among the young, including young teenagers. Some Russian children drink coffee at breakfast before the age of 10," he said. "But tea consumption also starts extremely early, with children of one or two years old drinking it," he added.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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