Russia is not quite the bear that the dragon of China is. But, Russia still has appeal despite the many real obstacles and challenges a business partner might face.
The laws change seemingly on a whim. The government jumps in and out of relationships. Work stops... A GM factory faced a temporary shutdown when it couldn't come to terms with a state-owned partner.
Still there are a number of joint ventures in the news.
Smirnov Vodka wants to be the spirit of choice in the land that invented vodka. But, Smirnov has its work cut out.
Daigeo plc, the world's largest liquor maker, and Alfa Group Consortium, owner of Smirnov, have teamed up to file wins anti-trust approval. I told you it's not easy to do business in Russia.
Diageo, home based in London will pay $50 million to Moscow-based Alfa for a majority stake in Smirnov. Then Diageo would distribute the vodka and is own brands through a joint ventureship with an Alfa subsidiary - A1 Group.
Make sense?
In short - if the laws can be bent enough to get these big booze makers to work together, look for more money to pour into Diageo's mug.
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