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| Rouble collapse: good for caviar eaters, bad for London estate agents | Rouble collapse: good for caviar eaters, bad for London estate agents |
| (35 minutes later) | |
| UK | |
| The collapse in the rouble and western sanctions against the Kremlin has led to economic turmoil in Russia. But the consequences are also rippling through the British economy, affecting Mayfair mansions to manufacturing plants. | The collapse in the rouble and western sanctions against the Kremlin has led to economic turmoil in Russia. But the consequences are also rippling through the British economy, affecting Mayfair mansions to manufacturing plants. |
| 1. Car sales | 1. Car sales |
| European car exports to Russia have slumped by almost 25% in 2014 and the figures are likely to get even worse. It is bad news for the UK car industry, which sold more than 114,000 British-made vehicles to Russia in 2013. The country is the UK’s third-largest export market and has been a big consumer of luxury brands, such as Rolls-Royce and Bentley, two quintessentially British names, although under foreign ownership. | European car exports to Russia have slumped by almost 25% in 2014 and the figures are likely to get even worse. It is bad news for the UK car industry, which sold more than 114,000 British-made vehicles to Russia in 2013. The country is the UK’s third-largest export market and has been a big consumer of luxury brands, such as Rolls-Royce and Bentley, two quintessentially British names, although under foreign ownership. |
| 2. London property | 2. London property |
| John Taylor, a top-end estate agent with a large number of Russian clients, said it had seen “a collapse in interest” from Russians. The drop in the value of the rouble has made London “prohibitively expensive”, said managing director David Adams. | John Taylor, a top-end estate agent with a large number of Russian clients, said it had seen “a collapse in interest” from Russians. The drop in the value of the rouble has made London “prohibitively expensive”, said managing director David Adams. |
| I have no doubt that many Russians would like to have more money in bricks and mortar in London, but it does not make sense to purchase when the currency adds 40% to the price. | I have no doubt that many Russians would like to have more money in bricks and mortar in London, but it does not make sense to purchase when the currency adds 40% to the price. |
| But Savills said it had not seen “drastic decisions” from Russian buyers in recent days. “As the currency crisis around the rouble unfolds we might see some previously active buyers pausing on a property search, or some even considering the sale of an existing home,” said Jonathan Hewlett, head of Savills London. But he said London’s status as a safe haven for wealthy Russians to store their money could deter possible sales. | But Savills said it had not seen “drastic decisions” from Russian buyers in recent days. “As the currency crisis around the rouble unfolds we might see some previously active buyers pausing on a property search, or some even considering the sale of an existing home,” said Jonathan Hewlett, head of Savills London. But he said London’s status as a safe haven for wealthy Russians to store their money could deter possible sales. |
| 3. Cheaper sausages | 3. Cheaper sausages |
| Russia’s ban on western food imports has resulted in a glut of pork in western markets, lowering the price of sausages and bacon by 14%. The price of cauliflowers and peppers has fallen by more than a third. Parsnip prices are down 28% and onions have crashed 38%, although this also reflects bumper harvests. | Russia’s ban on western food imports has resulted in a glut of pork in western markets, lowering the price of sausages and bacon by 14%. The price of cauliflowers and peppers has fallen by more than a third. Parsnip prices are down 28% and onions have crashed 38%, although this also reflects bumper harvests. |
| Although the UK did not sell many fruit and vegetables to Russia, British farmers are seeing prices fall because other European countries have been left with greenhouses and orchards bursting with unsold produce. | Although the UK did not sell many fruit and vegetables to Russia, British farmers are seeing prices fall because other European countries have been left with greenhouses and orchards bursting with unsold produce. |
| 4. Bargain caviar (online) | 4. Bargain caviar (online) |
| If sausages aren’t your thing, now would be a good time to buy your Russian caviar (farmed, and CITES-approved, of course). 50g of premium sturgeon now goes for about £25, a quarter of what similar produce retails for in London. | If sausages aren’t your thing, now would be a good time to buy your Russian caviar (farmed, and CITES-approved, of course). 50g of premium sturgeon now goes for about £25, a quarter of what similar produce retails for in London. |
| Russia | |
| In Russia on the other hand the currency collapse has nearly halved people’s purchasing power for foreign goods since the beginning of the year. Holidays are being cancelled, car dealers are not getting deliveries – and anyone with the cash to afford an iPhone will have to wait. | In Russia on the other hand the currency collapse has nearly halved people’s purchasing power for foreign goods since the beginning of the year. Holidays are being cancelled, car dealers are not getting deliveries – and anyone with the cash to afford an iPhone will have to wait. |
| 1. Car dealers | 1. Car dealers |
| It’s not just British carmakers taking a hit. Car dealers have reportedly halted sales of foreign brands, including BMW, Ford, Honda, Skoda and Nissan. The decision came after distributors stopped deliveries. Once sales resume, a rise in prices is highly likely. In fact, according to analyst Autostat, 23 car makers had already increased their prices since December. Land Rover increased its prices by 15% in November. Since mid-November, Renault has lifted prices by 8%. | It’s not just British carmakers taking a hit. Car dealers have reportedly halted sales of foreign brands, including BMW, Ford, Honda, Skoda and Nissan. The decision came after distributors stopped deliveries. Once sales resume, a rise in prices is highly likely. In fact, according to analyst Autostat, 23 car makers had already increased their prices since December. Land Rover increased its prices by 15% in November. Since mid-November, Renault has lifted prices by 8%. |
| In 2013 sales in Russia accounted for 7.4% of EU motor vehicle vehicles, with unit sales plunging 21% compared to 2012. This year has so far proved even worse. Between January and October, car exports from the EU to Russia fell 29% year-on-year. The drop in commercial vehicle sales was even steeper, plunging by 55.5% in the first 10 months of the year compared to the same period in 2013. Sales for the Renault, Nissan and Lada brands fell 8.4% in the first 11 months of 2014. Renault and Nissan are more exposed to Russia than any other car manufacturer. | In 2013 sales in Russia accounted for 7.4% of EU motor vehicle vehicles, with unit sales plunging 21% compared to 2012. This year has so far proved even worse. Between January and October, car exports from the EU to Russia fell 29% year-on-year. The drop in commercial vehicle sales was even steeper, plunging by 55.5% in the first 10 months of the year compared to the same period in 2013. Sales for the Renault, Nissan and Lada brands fell 8.4% in the first 11 months of 2014. Renault and Nissan are more exposed to Russia than any other car manufacturer. |
| 2. Holidays | 2. Holidays |
| Last year a New Year’s holiday package in Thailand would cost a family of three 200,000 roubles. This year, the same package would amount to more than double that. | Last year a New Year’s holiday package in Thailand would cost a family of three 200,000 roubles. This year, the same package would amount to more than double that. |
| Many Russians have been forced to forego the sandy beach in favour of the banks of the Volga river. | Many Russians have been forced to forego the sandy beach in favour of the banks of the Volga river. |
| One of Russia’s largest tour operators, Biblio Globus, said bookings have fallen by up to 30% since last week, depending on the destination. Russian holidaymakers are abandoning plans to travel to Europe and to a lesser extent, Egypt, Thailand and India. Meanwhile, the company is seeing a surge in interest in Russian destinations; including Karelia, the heavily forested region near the Finnish border, Altai on the Siberian steppes, and Sochi, the Black Sea resort that hosted the 2014 Winter Olympics. | One of Russia’s largest tour operators, Biblio Globus, said bookings have fallen by up to 30% since last week, depending on the destination. Russian holidaymakers are abandoning plans to travel to Europe and to a lesser extent, Egypt, Thailand and India. Meanwhile, the company is seeing a surge in interest in Russian destinations; including Karelia, the heavily forested region near the Finnish border, Altai on the Siberian steppes, and Sochi, the Black Sea resort that hosted the 2014 Winter Olympics. |
| Smaller operators are likely to struggle in these fluid market conditions. Due to a foreign travel ban introduced in July for military and police personnel, many had already started to find the going tough. This further hit may well drive some out of business all together. | Smaller operators are likely to struggle in these fluid market conditions. Due to a foreign travel ban introduced in July for military and police personnel, many had already started to find the going tough. This further hit may well drive some out of business all together. |
| 3. Fashion and Retail | 3. Fashion and Retail |
| Compared to last month, the price of a Tiffany silver chain has increased 16%. A Gucci bag has gone up by 10%. | Compared to last month, the price of a Tiffany silver chain has increased 16%. A Gucci bag has gone up by 10%. |
| The rouble’s plight isn’t only hurting Russians’ wallets. German retailer Metro AG has suspended the IPO of a Russian chain. Zara closed its flagship Moscow store this month. In its recent bankruptcy filings, Dutch fashion group Mexx cited the collapse of the rouble as one of the main reasons for going under – about one-third of the company’s retail outlets are in Russia. | The rouble’s plight isn’t only hurting Russians’ wallets. German retailer Metro AG has suspended the IPO of a Russian chain. Zara closed its flagship Moscow store this month. In its recent bankruptcy filings, Dutch fashion group Mexx cited the collapse of the rouble as one of the main reasons for going under – about one-third of the company’s retail outlets are in Russia. |
| One area that has yet to be affected by recent events are Swiss watches, which are instead likely acting as a refuge for weary Russian investors. CHF 31.4m worth of Swiss watches were exported to Russia in October, up 10.3% compared to October 2013. So far this year, exports from Switzerland have totalled CHF233.7m, a 5% increase on the year. | One area that has yet to be affected by recent events are Swiss watches, which are instead likely acting as a refuge for weary Russian investors. CHF 31.4m worth of Swiss watches were exported to Russia in October, up 10.3% compared to October 2013. So far this year, exports from Switzerland have totalled CHF233.7m, a 5% increase on the year. |
| 4. iPhones | 4. iPhones |
| Apple’s move to halt sales in Russia on Tuesday – because currency movements were making its gadgets too difficult to price – came two weeks after it hiked the price of a 16GB model by 25%. Up until November you could have bought an iPhone 6 in Russia for the equivalent of $700. That was a lot cheaper than the price in most of Europe – in London it is the equivalent of about $850. The impact on Apple will be marginal: last year, Russia accounted for about 1% of Apple’s mobile phone shipment volumes. | Apple’s move to halt sales in Russia on Tuesday – because currency movements were making its gadgets too difficult to price – came two weeks after it hiked the price of a 16GB model by 25%. Up until November you could have bought an iPhone 6 in Russia for the equivalent of $700. That was a lot cheaper than the price in most of Europe – in London it is the equivalent of about $850. The impact on Apple will be marginal: last year, Russia accounted for about 1% of Apple’s mobile phone shipment volumes. |
| Samsung, as always, was just a few steps behind its competitor. | Samsung, as always, was just a few steps behind its competitor. |
| Samsung shop hiked the price of this tablet by 3,200 r around lunchtime. 'We change prices several times a day now' pic.twitter.com/duEVUF4a7q | Samsung shop hiked the price of this tablet by 3,200 r around lunchtime. 'We change prices several times a day now' pic.twitter.com/duEVUF4a7q |