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Golden arches amid the onion domes. McDonald's, other Western consumer concerns court USSR

By Barbara BradleyStaff writer of The Christian Science Monitor / December 1, 1986



Washington

It's enough to make a capitalist's head spin. Peeking out from behind the Kremlin, in fluorescent yellow, is a set of golden arches. Around the corner, Russians order the works on their Pizza Hut pizzas. Next door, men and women pump away on Nautilus equipment, and a block away, a teen-ager checks out a music video of Cyndi Lauper.

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Such a scene, considered ludicrous before Mikhail Gorbachev's ascendency, is edging close to reality.

``The Soviet Union is just making the transition now to the consumer revolution,'' says Jonathan Sanders, assistant director of Columbia University's Averell Harriman Institute.

In the last month, both McDonald's Corporation and Pizza Hut, a subsidiary of PepsiCo, have announced they are actively negotiating to set up restaurants in the Soviet Union. Two weeks ago, an American company signed an agreement to broadcast Soviet television in the United States for 15 days, perhaps as early as this month. And another recently started shipping music videos to the Soviet Union. Pizzas to Petrograd?

The more significant movement is on the policy level. In the last two months, Mr. Gorbachev's government has made landmark changes in regulations to attract foreign business. For their part, American companies are watching with great interest, albeit some skepticism, as the second-largest previously closed market in the world begins to open up.

``The market niche is there,'' says George A. Cohon, president of McDonald's Restaurant Canada Ltd. ``They themselves acknowledge that feeding the population is a high priority for them. And we're the premier mass feeders in the world.''

Mr. Cohon has been trying to set up golden arches in the Soviet Union since 1976, with little progress. He was encouraged, however, by a flattering report about McDonald's that aired on Soviet TV Nov. 3. The report showed a clean, productive McDonald's and commented, ``Maybe there is something we can learn from this.''

The next day, PepsiCo said it was negotiating to open 100 Pizza Huts in the Soviet Union. Spokesman Keith Anderson says details of the joint venture may be ironed out early next year, with restaurants to go up soon after.

Pepsi has been making soft drinks in the Soviet Union since 1973. ``Pizza Hut is a logical extension of our relationship with the USSR,'' Mr. Anderson says. Pepsi's other fast-food operations - Kentucky Fried Chicken and Taco Bell - also fit into this category, he says.

In the Soviet Union, ``the whole process of food acquisition, preparation, and dining out takes much longer there than it does here,'' says Mr. Sanders at Columbia. ``There's going to be a huge demand for fast food,'' though he doesn't see a time when ``the sun will never set on Soviet McDonaldski's.''

But it's not just McDonald's vs. Pizza Hut. There are European fast-food contenders, too. In fact, L'Europeo, a Milan-based newsweekly, recently reported that a Dutch-Italian venture could be first in line to establish a fast-food operation in Moscow.

The venture involves Ital New Food Trading Company, an Italian restaurant cooperative, and the Dutch Atsal Food Corporation. The restaurants, to be called ``Springtime Outside of Italy,'' would seat 250 people, produce 5,000 meals a day, and charge the equivalent of $4.50 to $5 for most meals, L'Europeo said. Russians `wanna have fun,' too

Russians have an appetite for things other than fast food, says Marina Albee, president of Belka International (named for the Russian dog that was the first canine in space).

The Soviets have requested music videos, both 30- to 60-minute specials and 5-minute versions, Ms. Albee says. They have also asked for country and western, jazz, and rock videos. The contract, which she helped set up, is with Color Sounds, which sells subtitled videos of some 400 artists including Cyndi Lauper, Sting, and Lionel Richie.