An American canned food company, intervened by Russia to protect the National Food Supply, plans to boost its waning sales with exports to China and North Korea, according to documents reviewed by Reuters and people familiar with the matter.
Washington said that the treatment given to Glavprodukt, the only American company intervened by Moscow, will influence the planned restoration of relations between the United States and Russia, which seem to be stagnant.
Glavprodukt, the largest canned food producer in Russia, was founded by Leonid Smirnov, based in Los Angeles, and was intervened by the Kremlin in October 2024. Moscow argued that the company has a strategic importance for the supply of food in Russia.
Sales fell dramatically, indicate the documents. The production remained at similar levels, so the excess supply forced the company to look for new markets and increase its storage capacity, indicate strategic documents and two people familiar with the matter.
“They said they seized my company to ensure food for Russia. But they are not fulfilling this purpose, with this justification,” said Smirnov.
Smirnov is fighting in court to recover his company. The next hearing is scheduled for July 11 at the Moscow Arbitration Court.
In June, the new Glavprodukt management team, designated by the State, proposed to export to new markets, including North Korea and the Middle East. They also sought to increase sales to China, a market that represented approximately 1% of Glavprodukt sales last year.
The change of strategy shows how Russia’s trade changed from the invasion of Ukraine. Trade with North Korea, China and other countries that did not impose sanctions against Russia can take place outside Western influence.
Glavprodukt’s change in Glavprodukt seems incoherent with Vladimir Putin’s position on June 27 in Minsk, who wants to welcome American companies to Russia.
The negotiations between the United States and Russia about the war in Ukraine stagnated, after the disappointment of President Donald Trump after a phone call with Putin on July 3.
On the other hand, relations between the United States and China deteriorated since Trump imposed commercial tariffs on China, which caused retaliation by Beijing. Both countries agreed a commercial framework last month, but the United States had announced that it could restore tariffs on Chinese products in August.
Kremlin’s plans for Glavprodukt reflect the Russian strategy of managing foreign assets under state control.
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Glavprodukt points to the Chinese and African market
Moscow placed a dozen foreign companies under temporary administration since the invasion of Ukraine in February 2022.
The Danish beer Carlsberg and the French yoghurt Danone saw their assets finally sold to buyers related to Kremlin at bargain prices.
Among other companies with assets still in Russia are the American multinationals procter & gamble and Pepsico.
Russia regularly justified asset seizures labeling companies as strategic.
The Russian Attorney General used a similar reasoning to argue that the preliminary hearing of the Glavprodukt case should be behind closed doors, according to nearby sources.
Glavprodukt’s financial results deteriorated quickly, indicate documents, moving from a modest profitability to a regular monthly net loss.
Last month, the Ministry of Agriculture asked the company to explain why sales decreased substantially, according to two sources.
Companies that are intervened and delivered to management teams are under pressure to maintain employment and growth, they said.
The Ministry of Agriculture did not immediately respond to a request for comments.
Strategy documents reveal that Glavprodukt seeks to develop their online sales channels and develop plans to increase exports to China, in addition to highlighting markets in Africa and southern Asia, where the demand for canned fish of Glavprodukt could be high.
The employees tried to register the registered trademark of the company in China, according to the documents.
A prepaid shipping to China of products such as canned fish and condensed milk did not arrive on time, according to the documents, which highlights the possible risks of exporting exports.
With Reuters information
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