As Russia’s war against Ukraine drags into its second year, now is a bad time to be an openly Russian business in Ukraine.
One after the other, Russian brands are rebranding or otherwise trying to disguise their roots in their names, logos and bar codes.
Take the case of the Ukrainian unit of Russian Standard Bank. It changed its name to Forward Bank and now uses Ukraine’s national blue-and-yellow colors as part of its new logo.
Because of the war and Russia’s theft of the Crimean peninsula, associations with Russia evoke hostility among more Ukrainians.
Mychailo Wynnyckyj, associate professor at Kyiv Mohyla Business School, says that “any brand that is associated with Russia has to seriously change itself and hide its Russian nature in order to remain on the Ukrainian market. Otherwise, it will be boycotted.”
However, a spokeswoman for Forward Bank, Vira Tarasenko, denied that the rebranding has anything to do with politics. She said that the rebranding is linked to a change in management.
Hardly anyone believes the bank’s explanation.
Vadym Pustotin, head of the Kyiv-based advertising firm Sledopyt, said “the name is like a hook. For consumers, it evokes all the associations, memories and impressions connected with the brand.”
Some firms face no other choice than rebrand when they lose customers, according to Wynnyckyi.
Wynnyckyi said that a 45 percent decrease in Russian imports since Russia’s annexation of Crimea is proof Ukrainians are turning away from their former imperial overlord.
A March poll by GFK Ukraine, a market researcher, found that 67 percent of western Ukrainians and 22 percent of eastern Ukrainians have stopped buying Russian-made goods.
According to Wynnyckyi, it would be too complicated for Sberbank of Russia to change its name because it is state-owned and Russia’s largest lender, as well as Ukraine’s fifth largest by assets.
However, Wynnyckyi predicted that Sberbank will eventually leave the Ukrainian market.
But Sberbank said it has no plans to exit and, contrary to the anti-Russian trend, has experienced a 12.6 percent increase in customers, to more than 980,000, since March 31, 2014. The bank’s press service told the Kyiv Post that it stays away from politics.
But Sberbank lost at least one customers.
Kniazha insurance company said it switched from Sberbank to French Credit Agricole to placate clients. “One client refused to sign the agreed contract. When he saw Sberbank’s account details at the bottom, he just left,” Dmytro Grytsuta, Kniazha’s CEO, said of the first such experience he ecnountered in Dnipropetrovsk.
Other companies disowning their Russian roots in Ukraine include Lukoil, which sold its Ukrainian chain of 240 gas stations to Austria-registered Amic Energy Management GmbH in 2014.
The sale came after activists started boycotting the chain. The stations are in the process of being rebranded as Amic. Before the sale, Ukrainian authorities accused companies affiliated with Lukoil of financing terrorism, charges that the oil firm denied.
But some think Amic is just a proxy firm of Lukoil. It was founded in September 2013 and its general manager, Robert Nowek, worked for Lukoil in Poland and the Czech Republic for six years before he moved to Amic in June, just a month before the company purchased the Ukrainian branch of Lukoil, according to Nowek’s LinkedIn profile.
But even before the war, some Russian companies hid their origin by disguising themselves as Western brands for market appeal. Some of the most popular are shoe brands – Chester, Carlo Pazolini, clothing by Ostin, Oggi, Gloria Jeans and Gee Jay – and home electronics Vitek and Scarlett.
On a daily level, Ukrainians have boycotted groceries with the Russian bar code that starts with 46.
However, grocers have disguised the origin of some of these products.
Greenfield tea is available in many Ukrainian stores. While it presents itself as a British tea brand with factories in Ukraine and Russia, activists claim the company is actually Russian. Before Russia’s annexation of Crimea, Greenfield packages sold in Ukraine that indicated they were made in Leningradskaya Oblast in Russia and had a 46 bar code. Today the tea is sold under the Ukrainian bar code 482 and, according to packaging, is produced in Kyiv Oblast.
According to the website of Russian company Orimi Trade, Greenfield tea is a joint product of Greenfield Tea Ltd. based in London, while Orimi Trade is based in St. Petersburg.
Wynnyckyj says Orimi Trade has picked a British origin for its tea to make it more appealing. “Obviously, tea has to be English, or rather Indian,” he said.
Orimi Trade in Ukraine denied that Greenfield tea has anything to do with Russia.
To avoid boycotts, some register a product in another country with a different bar code.
The first three numbers of a bar code means the country of registration, but not the place of production.
That’s why goods from American brand Mars Incorporated are selling under the British bar code 50, but are produced at the factory in Moscow Oblast’s Stupino.
Before the war in eastern Ukraine, chocolate products like Snickers, Mars, M&M’s, Twix, Bounty and animal feed like Pedigree, Royal Canin and Whiskas – all Mars products – were sold with the Russian bar code 46.
Consumers, who have been buying Russian-made goods, said that it’s because some goods weren’t substituted in the same price range.
Oleksandr Valius, a 27-year-old designer from Kyiv, stopped buying Russia-made Snickers because of the price, but he still couldn’t find a relevant substitute. “I have been buying Snickers when it cost Hr 10, but now I stopped because it increased to Hr 22 per bar.”
Kyiv Post staff writer Yuliana Romanyshyn can be reached at [email protected].
