I emerged from the Metro this morning, walked towards the office, looked up and right in front of me was… (get this) Domino’s Pizza! In Kyiv!
Now, if you’re from anywhere else in the modern world this isn’t a big deal, but this is Ukraine! This is a country that has, so far, resisted the large-scale universal adoption of global brands. OK, it has some (MacDonalds, Metro Cash & Carry, Marks & Spencers) but not many.
But why not?
Well, I’m sorry to say but it’s not because:
a) Ukrainians value local producers over global mega-brands, or that they (as a society) reject multi-nationals
b) The multi-nationals haven’t been trying
c) Their is no market here for greasy fast-food
The problem is, as it always is in Ukraine, a problem of corruption, of a lack of transparency and accountability. It’s a problem with selective law enforcement and a murky and compromised legal system which exists to support vested local interests. It’s a problem with licensing, bribery and the refusal of the government to return taxes on time (if at all) or to honour contracts. A problem with tax police and the customs officers who can seize your assets and refuse to return them until a large sum has been paid to the fat controller. It’s a problem.
Would Ukrainians like to shop in Ikea? Of course they would. Just like the rest of us they like modern funky designs, high quality and cheap prices. Would Ikea like to embrace a market of 46 million people keen to invest their hard earned Grivna in a Malmo bed? Of course. Are they prepared to bribe regional Governors, buy the ‘correct’ people to get the licences, fund the government in unreturned VAT payments? It seems not. Despite owning land and some manufacturers here in Ukraine, Ikea pulled out of the country earlier this year and for me that’s why it is interesting.
Whatever your views of multi-national companies, it seems that many-many companies are prepared to put transparency and honest business before profit. Or, at least reputation matters and playing by the rules is seen as important. This must be seen as a victory for the numerous campaigns, lobby groups and prosecutors who have fought so hard against anything-goes corporate greed. Ask anyone from Siemens if they’d like to bribe a Russian official in 2010.
I interviewed the German Ambassador to Ukraine on Friday and he said himself – their is a long list of German companies who would happily invest in Ukraine but they won’t do it if civil rights are being curtailed, if there is no transparency and if the government steals your tax returns to fill its budget deficit. More alarming still, there are Germany companies involved in the upgrade of the countries diabolical healthcare system, who have put their projects on hold because the new authorities under President Yanukovych refuse to honour the contracts signed under the previous administration.
Anyway, back to Domino’s Pizza. Initially I thought wow – finally Ukraine is opening up! …but then I looked around and groaned. The huge (and it is HUGE) fascia DOMINOS on a big blue background looks out over one of Kyiv’s oldest and most picturesque squares. It sits uncomfortably squashed under the fantastic national chain of canteen-style eateries Puzata Hata and next to the colourful buildings of the National Bank and, it be honest – its impressively ugly. It does (whatever you think of their pizza) ruin its surroundings. Is it written in the Cyrillic alphabet? No, corporate branding doesn’t allow it. Is it unique, interesting or in anyway keeping with its surroundings? No. Is it really a sign of an opening up of trade and markets? or did they give-in and bribe the right guy? Who knows…
So, why the long rambling post about it? Well, basically because the whole globalization debate is playing itself out here in Ukraine right in front of me. Ukraine desperately needs many of the things we take for granted: better governance, a free and fair trading environment and a great deal more companies who value their staff, their social responsibility and their reputation. Will this enhance the culture here or the look and feel of Ukraine? No way.
Therefore, however large they make their sign – Dommino’s Pizza will never stop me eating at Puzata Hata. I’m happy they’re here but I don’t like their style.