Orkla questions United Confectioners Soviet brand monopoly

By Oliver Nieburg

- Last updated on GMT

Orkla argues that it is unfair that factories that used to produce major Soviet brands can now longer do so because United Confectioners owns most trademarks and has refused to issue licenses
Orkla argues that it is unfair that factories that used to produce major Soviet brands can now longer do so because United Confectioners owns most trademarks and has refused to issue licenses

Related tags United confectioners Soviet union Russia Trademark

Orkla Brands Russia has hit out at Russia’s leading player United Confectioners for keeping a monopoly on former Soviet brands, which were previously produced by every confectionery factory in the country.

Norwegian-based Orkla, which acquired a former state-run factory in Saint Petersburg in 2006, believes it is unfair that United Confectioners holds trademarks for around 70% of Soviet brands and is refusing to issue licenses to factories that previously produced the brands, such as its own.

Communist confectionery system

During the Soviet era, each region of the USSR had its own large confectionery factory that made products using the same brand names, which were based on recipes provided by the Soviet confectionery institution and then approved by the state authority.

After the breakup of the Soviet Union trademark laws introduced in 1992 allowed companies to gain exclusive right to the Soviet brands.

Part state-owned company United Confectioners snapped up 70% of the trademarks, including the most popular brands such as Alyonka, Burevestnik, Lastochka, Korovka and Ptichiye Moloko.

United Confectioners lawsuits

For the next 15 years United Confectioners approved licences for others to produce some of the Soviet brands it owned, but stopped after a further change to the law allowed it to sue over any trademark violations for up to double the cost of the goods.

Orkla Brands Russia has claimed that United Confectioners has been overly litigious ever since.

“For instance during 2010-13 there were over 60 lawsuits opened towards different confectioners on the territory of Russia and total compensation claimed is around 3 billion rubles ($91m),”​ said an Orkla spokesperson.

United Confectioners was contacted but did not respond to our questions.

Orkla: Our factory produced Soviet brands for decades

The Orkla spokesperson continued: “Orkla Brands Russia’s first priority is to support the traditions and rich history of Russian confectionery industry. This includes not only invention of innovative products but supporting well known Russians brands such as Mishka na Severe, Belochka, Osoby and Troika.”

“Our factories, and in particular a factory named after Nadezhda Krupskaya which is celebrating its 75th anniversary this year, were producing products under these names for decades.”

United Confectioners market share

United Confectioners operates 19 confectionery plants in Russia and commands an 18% share of the domestic chocolate market, joint top with Mars, according to Leatherhead Food Research.

An analyst from Leatherhead recently told this site that the popularity of Soviet chocolate brands was waning as younger consumers started to opt for foreign brands instead. See HERE​ for further details.

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