Vladimir Putin has reviewed the summary of the Cherkizovsky Market closure. He said the move gave a boost to domestic production in Russia. Oddly enough, hardly anyone else noticed it except the Prime Minister.
"Production of knitwear <...> increased by almost 3%, production of trousers is up 16% and suits 13%. These are the very real results of the crackdown on contraband and counterfeiting in that place," the Prime Minister said in his live video phone in "Conversation with Vladimir Putin." The authorities launched an offensive on the Cherkizovsky Market last summer after a report by the Trade and Industry Minister, Viktor Khristenko, which described the state of light industry in Russia as "critical." Price competition from illicit goods has "strangled" domestic production; therefore civilised trade should be developed while flea markets should be shut down. The first victim was the Cherkizovsky Market owned by Telman Ismailov which was shut down in late June.
Putin said that according to his data, clothes production had started to grow. Where did the figures cited by the Prime Minister come from: plus 5%, 16% and 13%? Putin's press secretary Dmitry Peskov says the data were provided by the Economic Development Ministry. No comments were obtainable last evening. Usually the Economic Development Ministry takes such figures from Rosstat. But Rosstat cites different figures. Between July and October production of knitwear dropped by 8.39%, of trousers by 2.15% while the production of suits increased by 48.6%. Comparing the four months between July and October with the same period of last year there has been a drop across the board: knitwear dropped by 23.54%, suits by 28.76% and trousers by 26.17%. The same trend is revealed by comparing the first ten months of this year and of last year: knitwear dropped 21.97%, suits by 31.82% and trousers by 14.44%.
Market participants did not experience an uplift after the closure of the Cherkizovsky Market: "goods production in Russia has indeed increased, but only because initially we started to place more orders here because of the drop in the rouble exchange rate," says Kseniya Ryasova, President of Finn Flare. "Our output was growing in 2009, but the closure of the Cherkizovsky Market made no impact on sales at Glance Shops," says Konstantin Semenkov, commercial director of Investlegprom which manages Glance chain stores. The director of the National Footwear Union, Natalya Demidova, says the fall in the production of footwear has slowed down in recent months: it was minus 9% in the first six months and minus 5% in the first nine months. But it is hard to attribute it to the closure of the Cherkizovsky Market, Natalya Demidova believes. The vendors have moved to other selling points in Moscow.
The Prime Minister's upbeat mood is shared by Vladimir Melnikov, President of Gloria Jeans, who said he was ready to "applaud Putin:" his company's sales increased by 28-30% in Moscow, Vologda and Nizhniy Novgorod when flea markets in these cities were shut down. In other cities sales increased by an average 15%, according to Melnikov.
This article was researched by Yelena Vinogradova, Maxim Tovkailo and Victoria Sunkina
Maria Solovichenko, Yulia Shmidt