Caviar Market in Upheaval After Soviet Breakup
With his ruddy face and ready smile, the old man on the corner could be just another of the elderly immigrants who throng the markets of Brighton Beach, New York’s biggest Russian enclave.
But the blue tin in his palm and others in his bulging shopping bags reveal his true business--hawking smuggled caviar.
Dozens of such furtive peddlers at Brighton Beach are living symptoms of upheaval in the secretive world of Russian caviar.
Buffeted by reforms and the breakup of the Soviet Union last year, the industry is in flux, say experts. State control is ending, but privatization has yet to take hold. Tins of second-rate roe not meant for export are flooding into America, and the days of a clubby few importers are numbered.
“There’s always been a cartel of people who controlled the market,” says Carolyn Collins, head of a Chicago company specializing in American caviar.
“Now the cartel is at sixes and sevens, because government control is gone and a lot of people are gaining access,” she said. “The standing joke right now is that it comes over in somebody’s hat.”
Surreptitious sales aren’t new.
A food so prized and perishable is bound not only to be sheathed in mystery but also prone to smuggling, mislabeling and counterfeiting--substitution of lesser fish roe for the kind most valued, the sturgeon’s.
“There’s always been a dark secrecy that’s hung over the caviar industry,” said Dro Proudian, the dapper U.S. managerial director of the Paris-based Petrossian, one of the world’s largest importers.
“I think it’s because it’s a very expensive commodity,” he said. “There’s a huge counterfeit business.”
What counterfeiters hope to replicate and connoisseurs pay high prices for is the smooth, sea taste of caviar from a few types of sturgeon.
These snout-nosed, prehistoric fish--some of which weigh a ton--populate the seas from Norway to North America. It was fresh roe from the beluga, osetra or sevruga species from the Caspian Sea that graced the czar’s tables and still fetches princely sums.
Iran, which borders the Caspian on the south, also produces caviar, but none may be sold in the United States due to trade embargoes. Thus, in the U.S. market, all eyes are on the formerly Soviet sources.
At Zabar’s bustling gourmet market in Manhattan, part-owner Murray Klein doesn’t hide his concern.
“It’s like anarchy over there,” said Klein, whose accent still gives away his Russian roots after 42 years in New York. “There’s nobody to talk to.”
Like other buyers, he was anxiously awaiting news of the spring catch, the first harvest since the demise of Kremlin control, for clues to the industry’s future.
During most of the communist era, there was no question as to who had control. The Soviet Fisheries Ministry oversaw production, and under its aegis, the Sovrybflot agency had a monopoly on exports. A host of small fisheries handled the second-rate caviar packed for domestic sales, while two Caspian plants--Astrakhan and Guryev--processed the best of the roe for export.
Under perestroika , however, Sovrybflot began losing its grip.
“In recent years, it’s been more advantageous to deal with other people bringing caviar out of the Soviet Union, than deal directly” with Sovrybflot, said Gerald Stein, a major New York importer. “We got more control, better prices this way.”
At the same time, overfishing became such a concern that two years ago the Soviets cut annual catch limits to 22,000 tons of fish from 55,000 tons, said Roy Castle, an aquaculture expert with Maryland, which signed an exchange agreement with Russia in his field 18 months ago.
As a result, Soviet caviar imports into the United States fell by about half, to 47,000 pounds in 1991 from 1990, according to the Commerce Department.
Today, central control is gone, Sovrybflot has lost its monopoly and Russia, the most powerful of the former Soviet states, has placed the fisheries ministry under the Department of Agriculture. Russia also controls the Astrakhan plant; Guryev is in Kazakhstan’s territory.
For the moment, no one knows the former republics’ plans. But many Americans are seeking more of a say in the future of the industry.
In interviews with six U.S. importers, all but one said they were negotiating to set up a joint venture or barter with a former republic.
“They need tractors, cars and petroleum equipment, and we want their caviar,” said Bruce Sobol, president of New York’s Caviarteria Inc.
Another firm, Epicurean International of Rockville, Md., plans to send a representative to Russia in May with a state-organized investment mission, to explore swapping fish-farming technology for caviar.
As part of the mission, Maryland will help Russia improve quality controls, especially in dealing with the problem of pollution in the Volga River, a spawning ground for Caspian sturgeon.
Many predict that such deals--and the prospect of reaping hard currency that used to wind up in Kremlin hands--will inspire improved standards. Others predict problems, even chaos.
In the United States, meanwhile, more and more visitors are arriving, thanks to the relaxation of travel restrictions in the former Soviet Union, and many of them are bringing in second-rate caviar.
Stein says he receives one or two phone calls daily from black marketeers, and Collins says she is suddenly getting offers--although she doesn’t import. They and others said their sales have not been hurt by the intruders.
On Brighton Beach Avenue, however, the damage may already be done, says Simon Feldman, the soft-spoken owner of a small market purveying caviar and other Russian delicacies.
“Look at this,” he said, prying open a tin bought from a peddler for $9--a bargain price, were it filled with sturgeon caviar as labeled, rather than the bitter-tasting lump fish roe he found inside.
“This one, it’s a crime,” he said. “Once people buy this, they won’t buy again.”
