ON PEPSI, VODKA AND THE POST-SOVIET CONSUMERIST REVOLUTION

ON PEPSI, VODKA AND THE POST-SOVIET CONSUMERIST REVOLUTION

The FINANCIAL -- Back in 1991, I attended a big “Whither Socialism” conference hosted by my alma mater, the Hebrew University in Jerusalem. A session I remember most vividly featured a Hungarian dissident, a poet, telling stories about the ineffectiveness of communist propaganda. “Communists”, he told a sympathetic audience, “tried to convince us that jeans can cause impotence in young males, and that Coca Cola is bad for people’s health”. At this point, a trembling female voice could be heard in the back of the conference hall: “But Coca Cola is bad for people’s health!”

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The introduction of capitalism to Russia and the rest of the communist block was spearheaded by the arrival of coveted Western consumer goods. Capitalism came in several characteristic flavors. I will never forget the peppermint gum – a single piece! – gifted to me, an 8-year-old Soviet kid, by a good-hearted Finnish tourist. This was an amazing stroke of good luck. Attracted by Russian vodka, binge-drinking Finns inundated St. Petersburg of the 1970s, but few of them distributed peppermint gum.

A more systematic exposure to capitalistic flavors started in 1974, with the opening of the first Soviet Pepsi factory in Novorossiysk (do read this amazing story!). Since rubles, for which Pepsi was sold in the Soviet Union, could not be converted into dollars, the capitalist genius found a creative solution: to barter Pepsi for Stolichnaya vodka (one liter of Pepsi concentrate for one liter of Stolichnaya), and, later, for Soviet warships and submarines.

It took 16 years, as well as Glasnost and Perestroika, for another major American brand to land on the dark side of the moon. When the first McDonald’s fast food restaurant opened in Moscow on 31 January 1990, it served a mind-boggling 30 thousand visitors in a single day, setting a new world record. Dying for a barbecue-flavored bite of American capitalism, Muscovites queued for over 6 hours outside the restaurant. Incidentally, while doing so, they had their backs turned towards Alexander Pushkin’s statue, a key symbol of Russian literature and culture.

While Pushkin may have been turning in his grave at this bizarre sight, a commercial ran on Soviet TV in 1990 rightly claimed that the “new generation [of Soviet citizens] chose Pepsi”. In more than one way, Consumerism, symbolized by Pepsi and McDonald’s, merely substituted for Marx and Lenin in the Homo Sovieticus’ mind, as beautifully satirized in Victor Pelevin’s bestseller Generation P (Homo Zapiens in Andrew Bromfield’s English language translation).

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Post-Soviet transition from socialism to capitalism was anything but linear or smooth. Some aspects of transition – privatization of state owned property, price liberalization and even macro stabilization – have been achieved within 3-5 years by most Newly Capitalist States. What followed, however, was a far cry from the imagined Consumerist Heaven, at least not for the vast majority of rank-and-file consumers who became increasingly concerned with survival. Not Pepsi. Not McDonald’s. Physical survival in the absence of jobs, with no security from crime, no social safety nets, and (sometimes) no electricity.

Yet, while post-Soviet economies and politics may often look like a caricature of the free-market-and-liberal-democracy gospel, Western-style consumerism and fascination with Western consumption patterns remain an ideological and cultural fixture of the Eastern European landscape.

Consumption of alcohol is an interesting case in point.

Figure 1: Per capita (15+) alcohol consumption (in liters of pure alcohol) in former Soviet Union, 1992-2011

Source: World Health Organization

Soviet alcohol consumption was dominated by strong spirits, such as Russian vodka, Georgian chacha, and Armenian “cognac” (brandy). Wine was second, mainly consumed in the traditional vine cultivation areas (Georgia, Moldova, Crimea). Finally, though quite popular with Soviet males, beer was third, available on tap or by the glass through specialized kiosks and street kegs (much like kvass).

With all government restrictions on alcohol consumption removed, the start of transition was associated with a large spike in alcoholism and a corresponding surge in deaths from related causes. The consumption of spirits remained very high until 2011, the last year for which we have WHO data, yet gradually declining. Throughout the same period, we observe a very moderate increase in wine, and very strong growth in per capita consumption of beer. These data suggest that the young Pepsi generation adopted not only the eponymous drink but also the associated life style – hanging out in bars, night clubs and restaurants, as opposed to getting drunk in entrance halls and stairwells of shabby Soviet condominiums.

The same changes can be observed at the level of individual countries. With 15.76 liters per capita, Russia’s alcohol consumption in 2011 was still the 4th highest in Europe. Yet, by 2013 it dropped to 13.5 liters of pure alcohol, a level comparable with European Union averages. Moreover, wine and beer are gradually overtaking spirits as the main source of alcohol for Russian drinkers.

The degree to which different countries adopted beer drinking can serve as a proxy of transition to Western life styles and consumption habits. Using WHO data on the change in beer consumption (in liters of pure alcohol) between 1990 and 2011, our Beer Consumption-based Transition Index for post-Soviet countries places Georgia third, after Lithuania (1) and Russia (2), and before Ukraine (4) and Belarus (5). Our neighbors Armenia and Azerbaijan, on the other hand, are trailing far behind.

The gradual transition to softer alcoholic drinks, as observed in the former Soviet space, is definitely a good thing. It remains to be hoped that this change in consumption habits – and culture – will soon be followed by improvements in economic performance, social solidarity and governance, allowing transition countries to rise above Consumerism and Nationalism, and finally reach the promised land of prosperity and human dignity.

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Led by Moses, the Jewish people spent some 40 years circling the Sinai Peninsula before being allowed into the Holy Land. This time was required for new generations to grow up, generations that had never known slavery, and were not as quick to fall for pagan deities, such as the Golden Calf – the biblical equivalent of Consumerism. Using this biblical story as a guide, we have only another 13 years to go.

Eric Livny is President at the International School of Economics at Tbilisi State University (ISET) and ISET Policy Institute. The views expressed in this article belong solely to the author, and do not necessarily reflect the views of the International School of Economics at TSU (ISET) or ISET Policy Institute.