--- title: FMCG Manufacturing, Sourcing and the Ukraine-Russia Unrest description: FMCG manufacturing. Will we see a migration of fresh manufacturing capacity eastwards when the Ukraine crisis is over? image: https://supplychain.enchange.com/hs-fs/file-1590548469-jpg/images/fmcg_factories_russia_ukraine-resized-600.jpg --- [Login](https://www.enchange.com/login/) - - - - [![Enchange](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/logo.png)](https://www.enchange.com/) # Route to Market & Supply Chain Blog # FMCG Manufacturing, Sourcing and the Ukraine-Russia Unrest Posted by Dave Jordan on Wed, Sep 24, 2014 - [Tweet](https://twitter.com/share) The unrest – what a terrible BBC understatement that is – in Ukraine does not look to be going away in the near future and will possibly be hanging over us for considerably longer. The “unrest” is not localised and it obviously involves many other countries and regional bodies with political, economic and territorial interest in the area. One recent escalation has been to ban the sale of EU goods inside Russia which is rather a throw-back to Cold War days when the same rule applied to iconic western branded goods like Coke and Wrangler jeans. In Cold War times big brand name FMCG consumption behind the iron curtain was probably driven by the efficiency of the black market and wider Russia was probably just a tempting white spot on the corporate globe. Now it is a different matter as Russia is a little bit more important, if you allow me to adopt some BBC understating diction. As part of the BRIC countries Russia is important in driving the growth aspirations of many of the world’s largest FMCG companies. Or it was....... Most of the large companies have developed pan-European sourcing strategies and gone are the days when each individual region or even country had its own small “local for local” factory operations. This means that tea maybe sourced from Russia for EU countries but olives are imported from EU into Russia, for example. Companies with a local for local approach in Russia will be largely immune to the EU ban whereas others may actually have exports to Russia as a critical part of their businesses. What can companies do about this? Well, legally and above board, not a lot. There is always someone willing and able to get passed all manner of regulations and restrictions but usually not in significant volumes and certainly not at the same overall cost of supply. Organisations with local manufacturing operations may well keep the Russian market supplied without hindrance and with little impact on cost and efficiency. M![fmcg factories russia ukraine resized 600](https://supplychain.enchange.com/hs-fs/file-1590548469-jpg/images/fmcg_factories_russia_ukraine-resized-600.jpg)eanwhile, those big names relying on exports into Russia from EU may be far less comfortable as they may be saddled with higher costs as production reduces and fixed costs have to be reallocated across residual volumes. In turn this makes factory gate prices higher for existing EU MSO buying offices if sourcing units do indeed pass on the full hit and wood-panelled HQ does not put its hand in its pocket. Turnover of the Russian MSO is also hit as it cannot get hold of products to sell. “Really not very good at all” says the man from Aunty Beeb in a clipped English accent brimming over with deep concern and gravitas. As the region is so important to FMCG growth is it just remotely possible that Russia will come out of this conflict with a far larger local manufacturing footprint and a huge amount of western investment?  Indeed, that may sound ridiculous now but will this turmoil force or persuade more companies to be present on the ground and behind the invisible curtain? *Image courtesy of exdos4 at [freedigitalphotos.net](http://www.freedigitalphotos.net/images/Other_Business_Conce_g200-Business_And_Communication_p137382.html)*[*freedigitalphotos.net*](http://www.freedigitalphotos.net/images/Other_Business_Conce_g200-Business_And_Communication_p137382.html) Tags: [FMCG](https://supplychain.enchange.com/topic/fmcg), [Dave Jordan](https://supplychain.enchange.com/topic/dave-jordan), [Manufacturing Footprint](https://supplychain.enchange.com/topic/manufacturing-footprint), [Supply Chain](https://supplychain.enchange.com/topic/supply-chain), [Sales](https://supplychain.enchange.com/topic/sales) ### Subscribe Here! ## Implementation Guide - 20 Steps to RtM Excellence [![cta-20-steps-implementation-guide-1](https://supplychain.enchange.com/hs-fs/hubfs/cta-20-steps-implementation-guide-1.png?width=336&name=cta-20-steps-implementation-guide-1.png)](https://supplychain.enchange.com/implementation-guide-to-20-steps-to-route-to-market-excellence) ## RtM Distributor Assessment Tool [![rtm-distributin-assessment-tool-enchange](https://supplychain.enchange.com/hs-fs/hubfs/rtm-distributin-assessment-tool-enchange.png?width=336&name=rtm-distributin-assessment-tool-enchange.png)](https://supplychain.enchange.com/analyse-the-performance-of-your-distributors---free-route-to-market-assessment-form) ## Distributor Assessment Guide [![distributor assessment guide-2](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/distributor%20assessment%20guide-2.webp)](https://supplychain.enchange.com/distributor-assessment-guide) ## 3rd Degree Partnership Guide [![3rd degree partnership download](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/3rd%20degree%20partnership%20download.webp)](https://supplychain.enchange.com/implementing-third-degree-partnerships-guide) ## Indirect Distribution: FMCG  Distributors vs. Wholesalers [![cta_ditributor-wholesale-download_sidebar](https://supplychain.enchange.com/hs-fs/hubfs/cta_ditributor-wholesale-download_sidebar.png?width=336&name=cta_ditributor-wholesale-download_sidebar.png)](https://supplychain.enchange.com/indirect-distribution-fmcg-distributors-vs.-wholesalers) ## 8 Steps to Drive Distributor Excellence ![cta-8-steps-distributor-excellence](https://supplychain.enchange.com/hs-fs/hubfs/cta-8-steps-distributor-excellence.png?width=336&name=cta-8-steps-distributor-excellence.png)   [![awrad](https://supplychain.enchange.com/hubfs/Enchange_October2019/Image/Supply-Chain-transparent_216px.png)](http://blog.feedspot.com/supply_chain_blogs/) ### Connect with Enchange Online ### Posts by Topics - [Dave Jordan (432)](https://supplychain.enchange.com/topic/dave-jordan) - [FMCG (386)](https://supplychain.enchange.com/topic/fmcg) - [Supply Chain (249)](https://supplychain.enchange.com/topic/supply-chain) - [S&OP (226)](https://supplychain.enchange.com/topic/sop) - [Route to Market (202)](https://supplychain.enchange.com/topic/route-to-market) - [Forecasting & Demand Planning (177)](https://supplychain.enchange.com/topic/forecasting-demand-planning) - [Performance Improvement (175)](https://supplychain.enchange.com/topic/performance-improvement) - [Distribution (141)](https://supplychain.enchange.com/topic/distribution) - [Traditional Trade (114)](https://supplychain.enchange.com/topic/traditional-trade) - [Sales (112)](https://supplychain.enchange.com/topic/sales) - [CEO (111)](https://supplychain.enchange.com/topic/ceo) - [Inventory Management & Stock Control (105)](https://supplychain.enchange.com/topic/inventory-management-stock-control) - [Humour (94)](https://supplychain.enchange.com/topic/humour) - [Brewing & Beverages (88)](https://supplychain.enchange.com/topic/brewing-beverages) - [Michael Thompson (88)](https://supplychain.enchange.com/topic/michael-thompson) - [Pharma (84)](https://supplychain.enchange.com/topic/pharma) - [RTM Assessment Tool (83)](https://supplychain.enchange.com/topic/rtm-assessment-tool) - [RTM (77)](https://supplychain.enchange.com/topic/rtm) - [RtM Strategy (74)](https://supplychain.enchange.com/topic/rtm-strategy) - [Logistics Management (71)](https://supplychain.enchange.com/topic/logistics-management) - [CEE (67)](https://supplychain.enchange.com/topic/cee) - [Ross Marie (64)](https://supplychain.enchange.com/topic/ross-marie) - [20 Steps to RtM Excellence (63)](https://supplychain.enchange.com/topic/20-steps-to-rtm-excellence) - [Customer service (63)](https://supplychain.enchange.com/topic/customer-service) - [KPI (61)](https://supplychain.enchange.com/topic/kpi) - [SKU (57)](https://supplychain.enchange.com/topic/sku) - [Logistics Service Provider (48)](https://supplychain.enchange.com/topic/logistics-service-provider) - [Cost Reduction (37)](https://supplychain.enchange.com/topic/cost-reduction) - [Retail (37)](https://supplychain.enchange.com/topic/retail) - [Supply Chain House (36)](https://supplychain.enchange.com/topic/supply-chain-house) - [supply chain excellence (35)](https://supplychain.enchange.com/topic/supply-chain-excellence) - [Doing Business in Africa (31)](https://supplychain.enchange.com/topic/doing-business-in-africa) - [ERP/SAP (30)](https://supplychain.enchange.com/topic/erp-sap) - [Supply Chain Analytics (30)](https://supplychain.enchange.com/topic/supply-chain-analytics) - [Christmas (28)](https://supplychain.enchange.com/topic/christmas) - [Integrated Business Planning (28)](https://supplychain.enchange.com/topic/integrated-business-planning) - [The ABC of RtM (27)](https://supplychain.enchange.com/topic/the-abc-of-rtm) - [Interim Management (22)](https://supplychain.enchange.com/topic/interim-management) - [Promotions (22)](https://supplychain.enchange.com/topic/promotions) - [Manufacturing Footprint (18)](https://supplychain.enchange.com/topic/manufacturing-footprint) - [IT (12)](https://supplychain.enchange.com/topic/it) - [3PL (10)](https://supplychain.enchange.com/topic/3pl) - [Information (10)](https://supplychain.enchange.com/topic/information) - [Order to Cash (10)](https://supplychain.enchange.com/topic/order-to-cash) - [Logistica Management (9)](https://supplychain.enchange.com/topic/logistica-management) - [Mergers & Acquisitions (9)](https://supplychain.enchange.com/topic/mergers-acquisitions) - [Telecoms (9)](https://supplychain.enchange.com/topic/telecoms) - [4PL (6)](https://supplychain.enchange.com/topic/4pl) - [Compliance (6)](https://supplychain.enchange.com/topic/compliance) - [ERP (6)](https://supplychain.enchange.com/topic/erp) - [Transportation (6)](https://supplychain.enchange.com/topic/transportation) - [3PLP (5)](https://supplychain.enchange.com/topic/3plp) - [Communication (5)](https://supplychain.enchange.com/topic/communication) - [Sourcing (5)](https://supplychain.enchange.com/topic/sourcing) - [Keith Marshall (4)](https://supplychain.enchange.com/topic/keith-marshall) - [Outsourcing (4)](https://supplychain.enchange.com/topic/outsourcing) - [Spare Parts (4)](https://supplychain.enchange.com/topic/spare-parts) - [Stefan Cucu (4)](https://supplychain.enchange.com/topic/stefan-cucu) - [Vietnam (4)](https://supplychain.enchange.com/topic/vietnam) - [covid19 (4)](https://supplychain.enchange.com/topic/covid19) - [Balanced Scorecard (3)](https://supplychain.enchange.com/topic/balanced-scorecard) - [DIY (3)](https://supplychain.enchange.com/topic/diy) - [DRS (3)](https://supplychain.enchange.com/topic/drs) - [Digital (3)](https://supplychain.enchange.com/topic/digital) - [Production Planning (3)](https://supplychain.enchange.com/topic/production-planning) - [Ratib Ratib (3)](https://supplychain.enchange.com/topic/ratib-ratib) - [Recovery (3)](https://supplychain.enchange.com/topic/recovery) - [SUPPLY PLANNING (3)](https://supplychain.enchange.com/topic/supply-planning) - [Andy Dixon (2)](https://supplychain.enchange.com/topic/andy-dixon) - [IBP (2)](https://supplychain.enchange.com/topic/ibp) - [Low Carbon (2)](https://supplychain.enchange.com/topic/low-carbon) - [Planning (2)](https://supplychain.enchange.com/topic/planning) - [Private Equity (2)](https://supplychain.enchange.com/topic/private-equity) - [Supply Chain Strategy (2)](https://supplychain.enchange.com/topic/supply-chain-strategy) - [WMS (2)](https://supplychain.enchange.com/topic/wms) - [Warehousing (2)](https://supplychain.enchange.com/topic/warehousing) - [Wholesale (2)](https://supplychain.enchange.com/topic/wholesale) - [Agrochemicals (1)](https://supplychain.enchange.com/topic/agrochemicals) - [Aristide Kouame (1)](https://supplychain.enchange.com/topic/aristide-kouame) - [CONSULTING (1)](https://supplychain.enchange.com/topic/consulting) - [Deposit Recovery Scheme (1)](https://supplychain.enchange.com/topic/deposit-recovery-scheme) - [Dianna Vorpagel (1)](https://supplychain.enchange.com/topic/dianna-vorpagel) - [Dumisani Siziba (1)](https://supplychain.enchange.com/topic/dumisani-siziba) - [Food (1)](https://supplychain.enchange.com/topic/food) - [HR (1)](https://supplychain.enchange.com/topic/hr) - [INNOVATION (1)](https://supplychain.enchange.com/topic/innovation) - [Make (1)](https://supplychain.enchange.com/topic/make) - [Manufacturing (1)](https://supplychain.enchange.com/topic/manufacturing) - [Refillable PET (1)](https://supplychain.enchange.com/topic/refillable-pet) - [Scheduling (1)](https://supplychain.enchange.com/topic/scheduling) - [WASTE (1)](https://supplychain.enchange.com/topic/waste) - [finance (1)](https://supplychain.enchange.com/topic/finance) - [procurement (1)](https://supplychain.enchange.com/topic/procurement) [See all](https://supplychain.enchange.com/bid/76695/FMCG-Manufacturing-Sourcing-and-the-Ukraine-Russia-Unrest#) Enchange Registered office: 2 Piries Place, Horsham, West Sussex, RH12 1EH, UK.   Enchange Limited is a company registered in England and Wales with company number 2862912.  Enchange VAT number: 528 7834 08                                                                                   ©2019 Enchange Ltd. All rights reserved [Privacy Policy](https://www.enchange.com/privacy-policy) [Cookies](https://www.enchange.com/cookie-policy/)