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Kremlin’s stamp of approval runs into trouble

By Rob Edens     Jan 24, 2014 in Business
Amsterdam - Set up in 2004 as a non-governmental organization, the Guild of Purveyors to the Kremlin has since set the standard for which many Russian companies aim. A legal battle within one of its member firms, however, could tarnish the Guild’s reputation.
The Guild of Purveyors to the Kremlin, much like the Purveyors to the Court of His Imperial Highness developed in tsarist Russia, is composed of an elite group of member companies, each of which has been awarded the coveted status of ‘Official Purveyor to the Moscow Kremlin’. The status is not far from a literal stamp of approval from Russian President Vladimir Putin himself. By 2007, 26 companies had been brought into the Guild’s inner circle. The membership of the newest recruits was celebrated in a ritzy ceremony at the Kremlin.
According to Igor Pototsky, Deputy Director of the Guild, the organization has two clear benefits for the Russian economy. First, the prospect of membership encourages Russian companies to aim for quality rather than simply profit maximization. "The Russian economy wants to be competitive but if it can't compete on quality, it'll depend on energy prices," Pototsky stated in an interview with Agence France Presse. Indeed, some analysts argue the Russian economy is dangerously dependent on high gas prices, which will likely decrease over the next decade. Quality, Pototsky argues, is what will allow Russia to compete with international companies in other sectors.
Secondly, the Guild says that it awards membership to companies that are more environmentally and socially conscious than the norm. Aiming for Guild membership “enforce[es] new environmental and quality standards that are more stringent than those normally required by Russian authorities,” according to Pototsky.
The members of the Guild are an eclectic bunch to say the least, including Russky Brilliant, a Russian vodka company that sells its product in gem-shaped bottles, and Bulgarian perfume company BRK Cosmetics. Members reportedly must pay a “reasonable fee” to join the Guild, but it has never been disclosed how much.
More about Russia, Putin, Kremlin, Soyuz, Sergey Vasilyev
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