Butter thefts highlight soaring prices in Russia amidst war
Food prices in Russia are dramatically increasing. Over just the past year, butter has gone up by 30 per cent. The central bank raised interest rates last month to 21 per cent—the highest level in over 20 years. A seemingly ordinary burglary at a grocery store, where 20 kilograms of butter were stolen, has become a genuine sensation in Russia.
A burglary took place in the city of Yekaterinburg that caught the attention of the media worldwide. Two burglars were recorded on surveillance in the small grocery store Dairy Place. One emptied the till while the other headed straight to the fridge for 20 kilograms of butter.
Butter in Russia "like gold"
The store owner commented on Telegram that this raid shows that butter is now "like gold." CNBC reports that Dairy Place is not the only victim of such thefts. Recently, similar incidents occurred in Russia, forcing some stores to secure butter in special containers.
A standard block of butter currently costs around 200 roubles. The minimum wage in Russia is 19,242 roubles.
According to data from the Russian statistical office, Rosstat, butter prices have increased by 30 per cent since last December. Thefts of such a basic product have highlighted the sharp price increases in Russia.
A Moscow resident, Stanislav told CNBC, "The cost of basic foods has been growing for the last three years. It is getting worse day-by-day and sped up, especially this year." According to him, prices for some products are 40 per cent higher.
The impact of war on the economy and society
The annual inflation rate in Russia was 8.5 per cent in October, significantly above the central bank's target of 4 per cent. In response, the bank raised interest rates last month to 21 per cent – the highest level in over 20 years, with another increase expected in December.
Consumers particularly feel rising food prices. Dairy products, sunflower oil, or vegetables, especially potatoes whose prices have risen by 74 per cent since last December, are becoming increasingly expensive. Anton Barbashin, a Russian political analyst and editorial director of the "Riddle" magazine, told CNBC that "literally half of all Russians spend most of their earnings on food, so they feel inflation the most."
The authorities' reaction and social mood
Inflation in Russia and throughout Europe has been exacerbated by the ongoing war in Ukraine. Rising food costs result from supply and labour shortages, higher wage costs, sanctions, and increased production costs.
Russian President Vladimir Putin, linked to the ongoing price crisis, dismissed claims that Russia is "exchanging butter for weapons." Recently, the TASS agency reported his remarks during a plenary session at the Valdai Club, where he emphasized that all previously outlined development plans, strategic objectives, and social obligations to the population are being fully carried out.
However, openly criticizing the war is risky for ordinary citizens. Any "discrediting" of the army can be punished for up to five years. Stanislav admitted that he doesn't have many discussions with other people because "it's dangerous to tell the truth in Russia."
Recordings showing burglaries in Russian shops. In both cases, butter was stolen:
Forecasts for the future
Even though many Russians link the war with inflation, state propaganda ensures that there is no mass dissatisfaction with the government or president due to persistent inflation.
Anton Barbashin claims it has always been "a great accomplishment of the Kremlin to separate the issue of Putin’s policies from the individual struggles of the Russians." However, he adds that as the economic situation worsens, the number of people wanting the war to end may increase.
At the same time, the Kremlin blames the West's actions and sanctions for Russia's economic problems, offering Russians an easy target to blame. - "We shouldn’t also discard that [the] Kremlin is blaming Western activities and sanctions for economic issues in Russia, offering an easy target for Russians to blame," Barbashin summarizes.
"Russian food prices are soaring — but no one dares blame Putin and the war" - summarizes CNBC.
Record defence budget
On Thursday, the State Duma approved a budget with record defence spending. In 2025, defence spending is forecast at 13.5 trillion roubles (approximately 181 billion CAD), a 30 per cent increase compared to the current year. This amount constitutes 6.31 per cent of Russia's GDP.
In the following year, defence spending will amount to 12.8 trillion roubles (approximately 172 billion CAD), and in 2027, 13.1 trillion roubles (176 billion CAD). In total, Russia plans to allocate at least 40 per cent of the budget for defence and national security from 2025-27.
