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Coca-Cola’s Contribution to the Russian Economy Assessed at HSE University

Coca-Cola’s Contribution to the Russian Economy Assessed at HSE University

© pixabay.com

Coca-Cola has invested over $6 billion in the Russian economy according to data published in a new study by the HSE Laboratory for Studies in Economic Sociology (LSES).

Coca-Cola’s history in Russia started in 1979–1980, when Coca-Cola and Fanta drinks were first imported to the Soviet Union ahead of the 1980 Moscow Olympics.

In 1992, local production started. Today, it includes ten plants in Moscow, St. Petersburg, Moscow and Rostov regions, Samara, Yekaterinburg, Novosibirsk, Krasnoyarsk, and Vladivostok.

Over the nearly 40 years it has operated in Russia, Coca-Cola has invested $6.2 billion in the local economy. In 2017–2018, it provided, on average, over 11% of all investment in the beverage industry.

Unlike common reports on leading companies’ dynamics, the LSES study provides a comprehensive assessment of the big investor’s contribution to Russia’s socio-economic development, including direct investment development, impact on GDP growth, taxation, and high-income job creation.

For example, in 2018, the share of added value produced by Coca-Cola out of total Russian GDP, taking into account indirect effects, totalled 0.2%. Cumulative tax payments, including those by suppliers and clients, exceeded 36 billion roubles, which comprises over 0.2% of total taxes paid to the Russian budget.

The company pursues policies aimed at supporting local manufacturers. Over 96% of direct purchases are made in Russia from local suppliers. In 1998, this indicator didn’t exceed 10%.

Coca-Cola employs over 7,700 people in Russia, 44% of whom are under 30 (the average indicator in Russia is 22%). Average salaries are 44% higher than the industry’s average.

HSE LSES’s study continues a previous project. The first calculations were made for 2013-2016 and presented at the Eastern Economic Forum. Data for 2017-2018 is presented both for the company in general and for its branches in the ten regions where it operates.

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