The European Union and the United Kingdom followed in the footsteps of the United States on Tuesday announcing a ban on the export of luxury goods to Russia, a measure that should not disrupt the lifestyle of oligarchs but convey a political message to the entire Russian people. Explanations.
Between the fall of the ruble and the fall in purchasing power, sanctions against Russia since the invasion of Ukraine on 24 February have already had very concrete consequences for the Russian people. But above all, Westerners seek to make life more and more difficult for a handful of personalities close to Vladimir Putin.
Seizure of property, freezing of assets, sanctions are now directly aimed at the Russian elite’s taste for luxury. In fact, on Tuesday, March 15, the European Union banned the export to Russia of its high-end sedans, its champagne, its jewelry, and other items valued by the oligarchs.
However, only goods with a value above a certain threshold are set at, for example, 50,000 euros for cars.
“Those who support Putin’s war machine should no longer be able to enjoy their lavish lifestyles while bombs fall on innocent people in Ukraine,” said EU Commission President Ursula von der Leyen. The United Kingdom made a similar decision by imposing an embargo on fashion and artwork.
A similar decision had been made a few days earlier by the United States. The measure is exceptional, because until now only North Korea was subject to restrictions on the export of luxury goods.
“The message here is addressed to the elites and consists in making them understand that there is still time to break away from Vladimir Poutine,” Julien Vercueil, a professor at the National Institute of Oriental Languages and Civilizations (Inalco), explains to France 24.), which notes a “schizophrenic” relationship between the oligarchs and European or American luxury. ‘The West is a model for all conspicuous consumption, but in their discourse the elite are forced to shout this decadent West down. Because his values are not Vladimir Putin’s values ”, analyzes this specialist in the economics of post-Soviet states.
However, these new sanctions are unlikely to disrupt the lavish lifestyles of senior brass, business leaders and politicians in need of the Kremlin.
“It remains complicated to hunt down these people who have excessive economic power because they travel or sometimes have dual citizenship,” specifies Bruno Lavagna, author of “Géopolitique du luxe” (ed. Eyrolles), along with France 24.
As explained by Courrier international, “wealthy Russian oligarchs are leaving their country to settle and invest in the United Arab Emirates or in Turkey. A way to protect their financial assets, but also to have” a distinguished lifestyle “, says Emirati newspaper Al-Bayan.
>> To read: Gas, oligarchs, finance … How Russia protects itself from Western sanctions
Among them Roman Abramovich, owner of the British football club Chelsea, whose plane has already landed several times in Istanbul since early March. Unlike its European neighbors, Turkey imposes no restrictions on Russian aircraft or luxury yachts that have dropped anchor in its ports in recent weeks.
Finally, to fill up with champagne, clothes and luxury watches, Kazakhstan seems to be an ideal entrance for the richest Russians. “There is a Eurasian economic union that will allow Russian elites to buy these products without further tariffs,” explains Julien Vercueil.
Russia, the golden palm of inequality in Europe
But the message of these new sanctions, specifically aimed at luxury goods, is not just for the oligarchs. It is also a matter of accentuating the divorce between these super-rich and the rest of the population.
“The majority of Russians are shocked by the inequalities they observe around them and the way in which these fortunes have been created,” assures Julien Vercueil.
Russia is the most unequal country in Europe. According to a Credit Suisse report, 1% of the Russian population concentrates 74.5% of national wealth and 10% owns 89% of the goods.
These inequalities are the result of a stratospheric increase in high incomes in the 1990s associated with the monopolization of the economic system by a handful of businessmen. The spread continued to grow against the background of a continued rise in commodity prices.
Russians who are able to spend thousands of euros for a Chanel or Prada bag represent only a small part of the population. Contrary to the cliché conveyed by the bling-bling billionaire, a lover of Rolex watches and Dom Pérignon champagne, the Russian market is therefore not crucial to the giants of the sector.
According to LVMH, world leader with brands like Christian Dior, Kenzo or even Moët and Chandon, Russia represents only 2% of its turnover. For champagne, Russia buys about 1.5 million bottles each year, or 0.5% of the market. A drop of water if we compare it to the 34 million bottles sold in 2021 in the United States.
>> Designations of origin war: France resumes its champagne exports to Russia
“Russian buyers weigh about 5% of the global market. The luxury world will therefore be able to recover because it is extremely robust, as the health crisis has shown,” sums up Bruno Lavagna. “adds the specialist in the luxury world.
From the beginning of March, several large corporations showed their support for Ukraine by temporarily closing their stores in Russia. Some, like LVMH, have announced that they will continue to pay their employees in the country.