After the government blocked exports worth millions of pounds, Russian oligarchs will no longer have access to baubles, such as cars, works of art and designer handbags sold by British companies.
Last year, UK companies sold a total of £ 2.6bn worth of goods to Russia, the largest of which was cars, about £ 400m, as wealthy Russians spread across prestigious brands such as Aston Martin, Bentley and Rolls-Royce.
Many luxury companies have already voluntarily stopped doing business in Russia, but the ban “will ensure that alligators and other members of the elite are denied access to luxury goods,” the government said.
Helen Brocklebank, chief executive of Walpole, a UK luxury business, said it was “fully supportive” of the ban.
“All of our members immediately complied with the ban and are working with local employees to support them in any way they can,” he said of its 250 members, including Bentley, Barberry and Rolls-Royce.
The clampdown on Kremlin-linked assets has thrown a spotlight on Britain’s industrial market amid fears that Russian oligarchs could use legal loopholes to evade sanctions.
Sotheby’s says it has already stopped importing and exporting antiquities to and from Russia and that its office in Moscow is currently closed. The company, which does not conduct auctions in Russia, has vowed to “strictly adhere to sanctions and regulations.”
Christie’s, who has also closed her office to the public in Moscow, said they had decided to cancel the sale of her Russian art, which was due to take place in London this summer.
According to the latest data from the Department for International Trade, cars account for নম্বর 386m – the UK’s number one export to Russia – or about 15% of all exports to the country. Other large markets, for drugs, equipment and power generators, show data.
Despite its predominance in export data, Russia is a relatively small market for UK car plants – it is estimated that the UK exports less than 10,000 cars a year to Russia out of 860,000 annual production in 2021. However, car dealerships from Aston Martin, Bentley and Rolls-Royce showrooms in Moscow and St. Petersburg, as well as car dealers from BMW-owned Mini.
Although David Bailey, a professor of business economics at the University of Birmingham, says the overall sales volume in Russia is low, the value of the expensive cars being sold there is high. The export ban was “another blow” to British carmakers who, he said, were already facing problems due to the ongoing shortage of semiconductor computer chips.
Bailey said British brands such as Range Rover have sold well in Russia because of the road conditions. It was “partly about the premium and luxurious nature of British cars but about their off-road capabilities”, he said.
“The Jaguar Land Rover (JLR) pulled in because they thought it was the right thing to do,” said Bailey, adding that the fall in the ruble would also make it harder for companies to price expensive cars. “This is not good news for the likes of Jaguar Land Rover, Bentley and Rolls-Royce.”
JLR and Aston Martin have already stopped deliveries to Russia. A Bentley Motors spokesman said it had also suspended car exports to Russia “until further notice”.
The scale of luxury spending in Russia is not the same as in countries like China and the United States.
Earlier this month, Barberry, one of Britain’s most famous exports, temporarily shut down three of its outlets in Russia, including a shop in Red Square.
The UK government has not yet provided a detailed breakdown of its luxury goods under its export ban, but analysts believe it will be similar to the EU, which includes clothing, accessories, precious stones and artefacts. It is unknown at this time what he will do after leaving the post. Although the famous vodka drinker, the Russians also exported a fraction of a malt, 42 million bottles, worth about 28 million pounds, there last year.