Mike Knowles head shot

Bankruptcy has struck again, this time at Joint Fruit Company (JFC), Russia’s largest fresh produce importer. It’s a hugely worrying development, but not because the group may or may not go out of business.

As it happens, many in the trade believe that JFC, like several other Russian companies before it, will survive simply by transferring some of its business to affiliate operators and carrying on as normal. The same thing is alleged to have occurred with Sunway and Sorus, two other Russian fruit importers that went out of business just a few years ago, and if this is indeed simply another case of corporate skin-shedding, you can certainly expect the Russians to be very busy securing new supply deals down in the Southern Hemisphere. Open the matryoshka doll and – na zdorov’ye! – there tends to be another one inside. The Russian banana market, meanwhile, is pretty strong at present, which should mean JFC’s core banana business weathers the storm.

No, this is a worrying development because it appears to confirm that something is hugely wrong with the business model being followed. Every year, Russia consumes a massive amount of imported bananas, apples, citrus and grapes worth hundreds of millions of euros, yet turning a profit on the sale of fruit to Russian retailers remains one of the hardest games in the world. Just look at JFC’s results for the first half of last year: a net profit of €1.1m on turnover of €143.5m can hardly be described as raking it in, now can it? We know where the produce goes, but is it really bearing commercial fruit?