The Russian Government Invests in a New Russian Fast Food Chain

Today, a Moscow newspaper leaked word that the Russian government plans to invest a billion rubles, the equivalent of $18 million, in a new restaurant chain. The venture is the brainchild of two brothers, both of them acclaimed film directors. Nikita Mikhalkov and his brother Konchalovsky reportedly wrote a letter to Vladimir Putin urging him to support their new enterprise as a way of assisting the Russian economy.

Deputy Prime Minister Arkady Dvorkovich agreed to provide a state-backed loan that will fund 70% of the startup costs and the co-founders will supply the remaining 30%. The company will commence with 41 restaurant locations and 91 food stands. Konchalovsky Mikhalkov’s wife, actress and television celebrity Yulia Vysotskaya, will help operate the venture. She presently stars in a cooking show and promotes “Eat at Home!”, a brand of Russian manufactured food products.

Anastasia Date employees (youtube.com) have learned that the restaurant plans to obtain at least a third of its wares from local sources, a decision that the Russian government hopes will benefit farmers. Following the annexation of the Ukraine, some governments imposed economic sanctions on Russia. Mr. Putin’s government responded by severely curtailing permitted food imports from overseas.

The growth of a state-sponsored food chain provides competition for many fast food restaurants in Russia, including foreign-owned McDonald’s, which maintains some 440 locations there. Former Finance Minister Alexei Kudrinreportedly expressed concern that state sponsorship of new startup restaurants could harm smaller firms.

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