According to the Federal Customs Service data, in 2016 Ukraine was among the largest buyers of many Russian products: from vodka to confectionery products, even milk exports increased, although there's a milk deficit in Russia itself. The most amazing thing happened with meat and beer. Deliveries of beer over the year increased by 1.5 times: up to 38.46 million dal, show the data of the Russian customs. Back in 2013-2014, Ukraine virtually never purchased meat and meat products in Russia. But in 2016 the purchases reached 47,893 tons. This is the best dynamics among all importing countries, and because of it is now Ukraine, according to the FCS, accounts for nearly 30% of all Russian exports of beer and meat. As a result, Ukraine remained the largest buyer of Russian beer, and for the first time became the largest buyer of Russian meat, pushing Kazakhstan to the second place.
The result is surprising, because at the end of 2015 the Ukrainian authorities in response to the Russian food embargo imposed a ban on the supply of most products from Russia, including beer and meat. According to the State Service of Statistics of Ukraine, from January to November 2016 meat imports from Russia to Ukraine fell by more than 40 times to $15 400 (data in natural terms are not disclosed). The dynamics with beer is similar, says the officer of the service, without giving precise data. Representative of the Ministry of Agrarian Policy of Ukraine could not explain the dynamics of export of Russian goods to Ukraine.
A FCS representative failed to specify to what Ukrainian regions Russia supplies its products. Deliveries to Lugansk and Donetsk might have been recorded as exports to Ukraine and State Service statistics does not record this information, the employee of the Ukrainian service explained the difference.
A dozen of interlocutors of Vedomosti in the Russian manufacturing and trading companies know that Russian products are available in the self-proclaimed Lugansk and Donetsk People's Republics (LNR and DNR).
Import products from Russia has really grown, but many times less than the estimates of the FCS, says a source close to the leadership of the DNR. To transport the Russian meat there is not as profitable, as from Ukraine using smuggling methods, he said. On the territory of the DNR, some companies manufacture products, such as sausages, from Russian raw materials, said the source of Vedomosti. Some of them are trying to circumvent the embargo and to supply products to Russia, but not really successfully, he continues.
Indeed, the recipients of almost all beef and pork exported to Ukraine over the past two years appear to be the companies from Lugansk and Donetsk regions, shows detailed customs statistics,studied by Vedomosti. LNR and DNR lack their own production and supplies from Ukraine reduced significantly, says the president of the National Union of pig breeders Yuri Kovalev. Therefore, in 2016 Russian companies managed to establish trade relations with buyers in the republics, he explains. It means commercial deliveries to the processing plants, not humanitarian aid, Kovalev says. The Russian meat is processed by the plants operating in Makeyevka (Donetsk region) and Lugansk, said their employees to Vedomosti.
The LNR and DNR import the products of the largest Russian producers; this also applies to beer and meat, recognize the market participants and industry experts, as well as employees working in the Donbass retailers. But Russian manufacturers either say that they do not sell in the unrecognized republics, or refuse to discuss this sensitive issue. Only a representative of GC Belaya Ptitsa acknowledged that his company last year sent a small lot of chicken to Ukraine, 18 t. But he admits that larger lots are coming to this country through wholesalers. GC Rusagro sells meat in Russia and increasing its deliveries of by-products to Asia and Africa, explained its director general Maxim Basov. Representatives of Cherkizovo and Miratorga declined to comment. Representatives of another two companies explained that part of the production is shipped to wholesalers and the further fate of the products is not known to them. But they admit, these products may well be sold in the DNR and LNR.
The reluctance of the leading companies to be associated with the supplies to the Donbass is understandable, say a Russian lawyer and his Kiev counterpart, who asked to remain anonymous. Formally, the penalties for the supply of goods from Russia to the LNR and DNR do not exist. But in the US sanctions list there are so many people from Donetsk, which means that for the cooperation not only with them but with their controlled companies and related parties the Russian suppliers may fall under the sanctions, says the Russian lawyer.
Ukraine in 2014 imposed sanctions against specific individuals and legal entities. The company, which actions can be regarded as a threat to national interests or national security of Ukraine (including economic) can end up in the sanctions list, says a lawyer of a Kiev major law firm. For each particular person in a particular case a type of sanctions is defined: it may be the limitation ot trade operations, arrest of the assets, explains the lawyer. Unsurprisingly, trade with the DNR is LNR is usually carried out by intermediatory companies working in Donetsk-adjacent regions, as the representatives of trade companies told Vedomosti. Business from the both sides of the border will find an elusion scheme, since people are to be fed, admits a Ukrainian officials. The representatives of corresponding Russian ministries declined to comment.