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Russian film-maker brothers offer to set up Russian rival to McDonald’s

April 09, 2015, 19:36 UTC+3 Alexandrova Lyudmila
© ITAR-TASS/Valery Matytsin

MOSCOW, April 9. /TASS/. Russia’s film-maker brothers, Andrey Konchalovsky and Nikita Mikhalkov, have come up with an idea of offering competition to McDonalds and all other well-established foreign fast food chains. For which purpose they would like to have some help from the state. As the daily Kommersant said on Thursday, Konchalovsky and Mikhalkov addressed President Vladimir Putin with a letter asking for assistance in creating what they see as a future a national public catering chain of cafes and shops of pre-cooked foods operating under the brand name Eat at Home. The paper says Putin has already asked the government to look into this business proposal.

"The purpose of this project is to promote import substitution and an alternative to Western fast food chains," the idea’s brain fathers have explained. According to their estimates, the project will require 971,800-million-rouble investment to launch. They hope that the costs will repay themselves in 4.8 years.

The Eat at Home joints are proposed in the format of small cafes and takeaways. All food will be cooked at meal prep factories, with locally produced foodstuffs accounting for no less than 30%-40% percent of the meals on the menu. These outlets will be providing foods for various social establishments, including orphanages and boarding schools. The Eat at Home brand belongs to Konchalovsky’s wife, actress and TV personality Yulia Vysotskaya, who is seen as a likely face of the yet-to-be created chain.

Amid the economic crisis the Russian market of public catering has experienced a major slump. The government-published daily Rossiiskaya Gazeta says that according to a survey by 2GIS company the growth rate of the number of bars in Russia’s cities with populations of one million and more have dropped by a factor of 18, and the number of restaurants has declined. Since the autumn of 2014 about 900 public catering outlets have been closed down in Moscow. Only chain coffee houses and fast-food joints keep growing.

Subway and McDonald’s are the two largest foreign fast food chains in Russia. In the wake of the western sanctions against Russia the latter experienced wholesale inspections by Russian regulators last year and the operation of several restaurants was suspended due to substandard food and abuse of sanitary requirements.

"The idea of creating a Russian fast food chain may prove promising, if sufficient capital is raised and the products on offer are in great demand from the standpoint of the price-to-quality ratio," the dean of the hotel and restaurant business department at the presidential academy RANEPA, President of the Russian Association of Restaurateurs and Hoteliers, Igor Bukharov, has told TASS.

"At first sight it looks like rather a political idea, like "Our Response to Hollywood." But the project is a very long-term one and its propaganda effect will take too much time to manifest itself," Bukharov said. Besides, such a chain would have no chances to win in competition with McDonald’s and Burger King in this price category.

But among Russia’s existing public catering chains - and there are more than 200 of them - some already enjoy certain success.

"Besides, Russia has a tiny one-third of the fast food joints one finds in the industrialized and many industrializing countries. The question is whether the correct choice will be made. If not, the authorities’ support will not help," Bukharov said. As an example he mentioned the Russian Bistro chain, which the Moscow government launched back in 1995 as an alternative to McDonald’s only to see it go loss-making. But in general the specialist says the idea of creating pre-cooked meal factories is correct.

"And there is the problem of money, of course. The government will not agree to give anything from the budget. But it might be possible to try to obtain favorable loans with government’s involvement. Such a project will not pay back in five years’ time, of course. But in seven to ten years it may."

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