Russian butter price surge sparks crime wave amid soaring inflation
Food prices in Russia are dramatically increasing. Over the past year alone, butter has risen in price by 30%. The central bank raised interest rates last month to 21%—the highest level in over 20 years. A seemingly ordinary break-in at a grocery store, where 44 pounds of butter were stolen, has become a sensation in Russia.
10:52 AM EST, November 25, 2024
A break-in in Yekaterinburg has captured media attention worldwide. Surveillance footage from the small Dairy Place grocery store recorded two burglars. One emptied the cash register, while the other headed straight to the fridge and took 44 pounds of butter.
Butter in Russia "like gold"
The store owner commented on Telegram that this heist shows that butter is now "like gold." CNBC reports that Dairy Place is not the only victim of such thefts—recently, a series of similar incidents in Russia has forced some stores to secure butter in special containers.
A standard butter packet costs around 200 rubles. The minimum wage in Russia is now 19,242 rubles.
According to data from the Russian statistical office Rosstat, butter prices have increased by 30% since December of last year. The thefts of such a basic product highlight the sharp price increase in Russia.
Stanislav, a resident of Moscow, 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, the prices of some products are higher by 40%.
Impact of the war on the economy and society
Russia's annual inflation rate in October was 8.5%, significantly above the central bank's target of 4%. In response, last month, the bank raised interest rates to 21%—the highest level in over 20 years, with another hike expected in December.
Consumers particularly feel rising food prices. Dairy products, sunflower oil, and vegetables, especially potatoes, which have risen by 74% since December of last year, are becoming more expensive. Anton Barbashin, a Russian political analyst and editorial director of the journal "Riddle," told CNBC that "literally half of all Russians spend most of their earnings on food, so they feel inflation the most."
Government response and social sentiments
Inflation in Russia and throughout Europe has been exacerbated by the ongoing war in Ukraine. The rise in food costs results from supply and labor shortages, higher wage costs, sanctions, and increased production costs.
Russian leader Vladimir Putin—often attributed responsibility for the price crisis—denied that Russia "trades butter for weapons." Recently, the TASS agency reported his statement during a Valdai Club plenary session, where he highlighted that all previously outlined development plans, strategic objectives, and the state's social obligations to the population are being fully accomplished.
However, openly criticizing the war is risky for ordinary citizens. Any "discrediting" of the army can be punished for up to five years. Stanislav acknowledged that he does not have too many conversations with other people because "it is dangerous to speak the truth in Russia."
Footage showing break-ins at Russian stores. In both cases, butter was stolen:
Future prospects
Even though many Russians associate the war with inflation, state propaganda means there is no widespread discontent with the government or the president regarding persistent inflation.
Anton Barbashin claims it was always "a great accomplishment of the Kremlin to separate the issue of Putin’s policies and individual struggles of the Russians." However, he adds that with the worsening economic situation, the number of people who want to end the war may increase.
At the same time, the Kremlin blames the West's actions and sanctions for the economic problems, offering Russians an easy target. "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 says.
"Russian food prices are soaring — but no one dares blame Putin and the war," summarizes CNBC.
Record defense budget
On Thursday, the State Duma approved a budget with record defense spending. In 2025, defense expenditures are expected to be 13.5 trillion rubles ($135 billion), a 30% increase compared to the current year. This sum constitutes 6.31% of Russia's GDP.
Next year, defense spending is projected to be 12.8 trillion rubles ($128 billion), and in 2027, 13.1 trillion rubles ($131 billion). Russia plans to allocate at least 40% of the budget for defense and national security from 2025 to 2027.
