Select Committee on Foreign Affairs Minutes of Evidence


APPENDIX 10

Memorandum submitted by Cadbury Schweppes Plc

  Thank you for your recent enquiry regarding our observations on the role and policies of the FCO in relation to the Russian Federation. I am happy to provide a response based on colleagues who are either concerned with the development of our Russian chocolate confectionery factory at Chudova near St Petersburg, or are now involved with the business and its operations in that area.

  In discussing our experiences, we have reviewed a number of issues in which the Committee will be interested, notably:

    —  level and effectiveness of diplomatic representation;

    —  awareness of commercial potential;

    —  support for British business;

    —  foreign policy aspects of economic, financial and technical relations.

  Our discussions have not covered some of the broader political, social and economic issues indicated in the enquiry brief.

  In evaluating the levels of interest and support we have received from Embassy staff in Moscow and St Petersburg, I would describe the picture as being somewhat mixed. Certainly relationships have been good, particularly in St Petersburg, closer to our Chudova operation and perhaps therefore of more immediate interest, but contacts have been somewhat infrequent, and officials have not always appeared to be accessible to us. Whilst the Embassy staff have appeared eager to attract new UK business into the country, and into the area, there has appeared to be less concern in continuing those relationships on an ongoing basis, at a time when some of the real difficulties may emerge. Certainly we would contrast our perceptions with those of, for example, the Dutch and South African diplomatic services, who appear to take much more of a proactive role in going out to meet and consult with business on a regular basis. Sometimes the impression is that the political agenda weighs more heavily than the priorities of the UK officials than do issues of business and economic support to organisations such as ours.

  Talking to colleagues who were involved in the early development of our Russian business, it seems clear that much more support would have been welcomed from the commercial and other Embassy staff during the period between 1994 and 1997 when we were making the original investment and building the factory. In summary, it would seem that there was little in the way of information or help in the early stages of discussions with the regional authorities and it was our local consultants, rather than the Embassy, who were able to provide us with contacts and data. One particular issue my colleagues recall was concerned with the efforts we were making to obtain the benefit of lower import duty which is apparently enshrined in a Presidential decree (decree 73) which would have allowed us as a major investor to obtain lower duty rates on imported goods. Despite many contacts, we received little support in helping us to obtain such relief which we believe others had obtained.

  In seeking to develop the right networks we were keen to join an economic committee, chaired by the then Prime Minister (Chernomydin), made up of Russian officials and foreign investors. For whatever reason, we were constantly declined a place on the committee even though smaller investors than ourselves were able to take part. Embassy staff appeared unable to assist in the arranging of various meetings with federal officials, and again when dialogue did finally take place, it was as a result of introductions made by our consultants.

  I trust that the above comments do not appear too negative and it may be that we were unaware of some of the efforts being made on our behalf. Ours is of course a particular perspective, and we do look to work constructively with Embassy staff in both the capital and the regions as our business continues to develop in this important market during the years to come. I trust our comments will be of some value to the Committee, and will look forward to hearing more of their findings.

D. Neil Makin
External Affairs Director


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2000
Prepared 28 February 2000