CARR GOTTSTEIN IN SIBERIAN LINK

ELLIOT ZWIEBACH

ANCHORAGE, Alaska -- Carr Gottstein Foods here is ready to make a name for itself in Russia.

The company is getting an early jump as a supplier to the Eastern areas of that country.

Carr Gottstein has shipped more than $500,000 worth of goods to customers in that region since opening up lines of communication with business people there last fall, according to Jerry Barnes, director of sales.

The retailer-wholesaler plans to attempt to

secure additional customers throughout the Far Eastern stretches of Russia in the next few months, he added. Furthermore, the company eventually will seek more permanent arrangements. "Over the long term, we will look at opportunities for joint ventures in warehousing from a technical support standpoint or retail stores from an operational support standpoint," he said.

However, Barnes said he doesn't expect Carr Gottstein to become involved in any joint ventures to operate warehouses or retail stores for at least three to five years. Carr Gottstein regards the Eastern sector of Russia as a potentially strong base of business.

"We've only been in one market there so far, but the relationships we're developing now -- making contacts and shipping good quality merchandise at reasonable prices -- will serve us well once the political situation gets more settled and the currency stabilizes.

"Because at that point, a lot of carpetbaggers from the U.S. and other countries will begin trying to move into Russia to dump a lot of inferior goods there. We're making our contacts before those kinds of things happen."

Barnes made his first trip to Russia last October, setting up a "food fair" in the town of Magadan, in the northeastern part of the country along the Sea of Okhotsk.

He selected Magadan as Carr Gottstein's first Russian target, Barnes explained, because of contacts the company had with an equipment supplier in Anchorage that had been involved in a business relationship with companies in Magadan for six months.

Carr Gottstein invited 300 guests to the sampling, including local business people as well as grocery retailers.

"Our purpose was to show them the kinds of goods and services we can offer in an attempt to set up supply contracts," Barnes said.

Historically, people in the Far Eastern regions of Russia were buying a lot of merchandise from other parts of Asia -- much of it of lower quality and outdated, Barnes explained.

"In addition, the Russian mentality has directed them to buy a truckload of goods and sell it everywhere in town until it's all gone. But I talked to them about a continuous flow of goods that would be available every week and every month."

The supply agreements he concluded in October have resulted in shipments of canned and packaged goods every month out of Tacoma, Wash., under the auspices of Far East Shipping Co., a Russian operation, plus two charter planeloads of fresh and frozen goods paid for by the recipients.

Boat shipments take three weeks. Most of the dry goods are private-label lines, Barnes pointed out, "because major brand manufacturers get hung up in internal turf wars between their domestic and international divisions about who has responsibility for shipping overseas."

Barnes said he plans to make another trip to Magadan later this year. He also has scheduled food fairs in three different Far Eastern Russian cities. "The people of Far Eastern Russia are good, sincere, genuinely caring people," Barnes said. "They just need so much, and we've been welcomed very warmly because we've made the effort to contact them."

Carr Gottstein takes the same markup on goods sold to these customers as it makes on sales to domestic wholesale customers, he noted. "And although we do a lot of extra work for the same money, we believe it will pay off for us in the long term."