Kiss the cook Financial records show that the war in Ukraine has meant great business for the Russian military’s clothing and food suppliers
During the first year of the full-scale invasion of Ukraine, contractors working for Voentorg, the Russian military’s official clothing and food supplier, reported profits one and a half times greater than in 2021, according to journalists at Vertska who analyzed the financial statements of companies working with the Defense Ministry in the areas of food services, laundry, dishwashing, and sewing. Meduza summarizes Vertska’s main findings.
There are 97 firms on the list of Voentorg’s contractors. In 2021, 70 of these companies reported their earnings. A year later, just 58 businesses on the list still released financial statements. Russian laws allow companies not to publish income and expense data if the information contains state secrets or other protected information.
Verstka discovered that the 58 companies with financial disclosures in both 2021 and 2022 reported earnings one and a half times higher over the course of a year. The total amount rose from 4.6 billion rubles ($48.2 million) to 7.6 billion rubles ($79.7 million).
In all these contracts, the Defense Ministry’s greatest area of spending remains in food services, where Voentorg uses 32 different contractors. The late Yevgeny Prigozhin controlled 18 of these firms. The Russian military didn’t tear up its existing contracts with these companies even after the mercenary leader’s armed mutiny in late June. Prigozhin died in a plane crash outside Moscow on August 23, but the catering deals remain in place.
Russia spent a minimum of 109 billion rubles ($1.1 billion) in federal money on feeding soldiers in 2022 — that was the total revenue reported by Voentorg’s contractors. Journalists at Verstka learned that these companies’ net profits reached almost 5 billion rubles ($52.4 million) in the first year of the full-scale invasion of Ukraine. A year earlier, net profits were just 2.4 billion rubles ($25.2 million).
“Master Cleaning” LLC, whose minority shareholders include long-time Moscow Variety Theater artistic director Gennady Khazanov, posted the biggest earnings among Voentorg’s launderers last year: 35.5 million rubles ($372,000). “I’m not involved in the company’s operations, and I’m really not plugged into what’s going on there,” Khazanov told Verstka. “I haven’t received any funds, nothing. I made an investment at some point. I’ve got some minuscule [share] there. I don’t even remember.” Asked if he plans to sell his stake in the company, Khazanov answered: “Of course, I’ll be leaving. If it’s that toxic, what do I want with it.” He also said the company assured him it isn’t doing business with Voentorg. The contract exists “only formally,” he explained.
In 2022, just half of Voentorg’s laundry contractors published financial records. These documents show that the companies’ revenue totaled more than 4 billion rubles ($42 million). The Defense Ministry’s supplier also hired 15 firms as “washing personnel.” Eleven of these companies filed financial reports for 2022 showing their combined revenue was nearly 332 million rubles ($3.5 million) — 18.5 percent higher than in either of the two preceding years.
There were financial disclosures in 2022 from only 14 of the 43 businesses under contract with Voentorg to supply tailoring and clothing services. Between 2021 and 2022, these companies’ revenue jumped from 16.4 billion rubles ($17.9 million) to 20.9 billion rubles ($219 million). Vertska found that net profits for these businesses rose by 400 million rubles ($4.2 million) during this period, reaching 2.5 billion rubles ($26.2 million).
Voentorg also has a contract with one of its own subsidiaries, Voentorg-Retail, which recorded almost 22 billion rubles ($230.6 million) in net profits in 2022 after incurring a loss of 18.8 billion rubles ($197 million) in 2021.
The Voentorg Joint Stock Company did not report its income in 2022. In 2021, its revenue amounted to 81.1 billion rubles ($850 million), though its net profits were just above 3 million rubles ($31,440).