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. Last Updated: 07/27/2016

Stores Scramble to Find Chicken

Discount chain Pyatyorochka used to fill the freezers of its stores in Moscow and St. Petersburg with inexpensive U.S. poultry. But the Russian ban on the birds, which came into effect Sunday, has left the retail giant scrambling to find new suppliers that can provide cheap meat.

"We don't know if the consumers of cheap American chicken are ready to consume more expensive Russian chicken or whether they will now completely refuse to eat it altogether," said Pyatyorochka general director Sergei Lepkovich.

"We also don't know whether local poultry producers will be able to meet our new needs," he said.

With stockpiles of U.S. poultry fast disappearing, Pyatyorochka and the many other sellers of bargain-priced poultry, particularly at outdoor markets, were fretting Monday about keeping consumers happy -- and buying. The price of Russian poultry is 30 percent higher than the U.S. imports, which last year accounted for about 70 percent of all poultry sold in Russia.

As some retailers sought to find other sources for poultry, a team of 12 U.S. officials was at the Agriculture Ministry raising a squawk about its decision to stop issuing import licenses March 1 and ban the meat March 10. The ministry had said U.S. authorities failed to provide sufficient information about the antibiotics, preservatives and other substances used in the poultry industry and had accused U.S. exporters of violating Russian veterinary rules.

First Deputy Agriculture Minister Sergei Dankvert said after the meeting that the ban could be lifted in as soon as 60 days, which implies that a 1996 Russian-U.S. agreement on poultry imports will be revised, Interfax reported.

Dankvert said the U.S. side had confirmed that antibiotics used for human medical treatment are also used in poultry farming, allowing new requirements for the quality of supplies to be drafted within a week.

The meeting also resulted in the formation of four expert groups to discuss food supply certificates, salmonella-contaminated poultry and the use of antibiotics, hormones and other preparations in raising chickens.

Dankvert met with officials from the U.S. Agriculture Department, the U.S. Trade Representative's Office and the Food and Drug Administration, who had tried to set up the talks already on March 1 but were rebuffed for not having presented documentation on poultry production as requested by the Agriculture Ministry.

The U.S. side handed over an 800-page document detailing the use of antibiotics and other substances in the poultry farming Saturday.

Dankvert cautioned, however, that there may be no quick solution -- even within 60 days -- because tests over the weekend found the presence of salmonella in six more samples of U.S. poultry meat. Last week, Russian experts said they found salmonella in nine shipments with U.S. poultry in St. Petersburg ports.

"It is pointless to discuss other problems until the salmonella problem is resolved," Dankvert was quoted by Interfax as saying.

U.S. Ambassador to Russia Alexander Vershbow expressed optimism after the meeting, saying negotiations got off to "a good start," Interfax reported.

Still, he did not say how long it might take to settle the dispute.

The ban could cost U.S. chicken farmers up to $700 million a year.

Some lawmakers, meanwhile, saw a silver lining to the ban.

"If [Deputy Prime Minister and Agriculture Minister] Alexei Gordeyev ends up having enough political clout to stand up for Russian poultry farmers, then Russia could cover that enormous supply from United States within 1 1/2 years," Nikolai Kharitonov, head of the Agrarian-Industrial bloc in the State Duma, said on NTV television.

Moscow Mayor Yury Luzhkov said the ban was a step toward weaning Russia off food imports.

"The United States played an important role in providing Russia with this very important product," Luzhkov told Interfax. However, Russia is now "close to providing for itself."

"We must support Russian producers, whose production, by the way, is of a better quality than that of imports," he said.

Visits to several outdoor food markets Monday found that U.S. poultry was still on sale in many stalls at pre-ban prices of about 40 rubles per kilogram. But vendors said their supplies were fast running out.

"People are afraid," said Nina Vasilyeva, a vendor at the Dynamo Market. "But they're still buying American chicken. Pensioners, especially. They go for price. People who understand food buy Russian, they know that ours taste better."

"Pensioners preferred buying American -- it still costs 40 rubles, while Russian chicken costs around 60 rubles now," said Katya Polivanova at the Orekhovo market. "We are selling out the last batch of American poultry, and there is no more left in our warehouse."

Retailers targeting the middle- and upper-class Muscovites said that they were unfazed by the ban and that their poultry prices would not go up.

"We have many Russians suppliers, as well as Hungarian and French suppliers," said Mikhail Panovko, spokesman for the country's largest retailer, Perekryostok. "We don't even expected price increases."

Natalya Gerasimova, deputy head of procurement at Rosinter Restaurants, which operates a number of eateries including Patio Pizza, American Bar & Grill and the Rostik's fried chicken fast-food chain, said that its outlets almost exclusively use Russian poultry and that there should not be any problems with supplies or prices.

The Sedmoi Kontinent supermarket chain agreed. "We have no worries at all -- we expect our Russian suppliers to cover all of our orders," said Sedmoi Kontinent spokesman Valentin Zapivalov. "Prices are unlikely to grow because they are already high enough."

A number of regions -- including Leningrad, Vologda, Sverdlovsk, Chelyabinsk, Orenburg and Tambov -- also said they would have enough supplies to cover their needs.

If the ban goes on indefinitely, Russia will never be able to satisfy demand for poultry, said Larisa Dorogova of the Institute for Agricultural Market Studies. "But it is necessary to cut the share of imports to support local producers," she said.

Russia imported more than 1.3 million tons of poultry last year, with over 1 million coming from the United States.

Gordeyev said Monday, "There are other countries that can provide Russia with quality poultry instead of nonquality."

Brazil is the second largest exporter of poultry to Russia, followed by France, Germany, Hungary and Holland.

The managers of BRF, one of Brazil's largest poultry exporters, said demand for Brazilian poultry may grow by 20 percent under the ban, RIA Novosti reported Monday.

"We will gain if Russia keeps the ban on American chicken legs for a couple of months," said BRF chief executive Duncan Potter.

Staff Writers Torrey Clark and Nabi Abdullaev contributed to this report.