The first 'product of capitalism': how the USSR exchanged 17 submarines for Pepsi soda
'24.10.2020'
Source: Big Picture
Nikita Sergeyevich Khrushchev liked Pepsi so much that negotiations on the supply of the drink by the Americans immediately began. What came of it, says Big Picture.
In 1959, US President Dwight Eisenhower and Secretary General Nikita Khrushchev tried to mend relations between the USSR and the United States. First, an exhibition of the achievements of the Soviet economy was held in New York, and on July 29 of the same year, the Americans arrived in Moscow.
For the first time, the Soviet people tasted the bourgeois soda Pepsi, which the ossified communist leaders also liked.
Exhibition of Achievements of the Capitalist USA
Many stands were set up in the capital's Sokolniki Park, next to which Soviet people were introduced to the delights of the capitalist world. Pepsi-Cola was a huge success among the visitors of the event. During the entire time of the exhibition, Soviet citizens drank 3 million glasses of the drink.
As part of the American delegation, PepsiCo executive director Donald McIntosh Kendall arrived and gave the drink to Khrushchev.
Nikita Sergeevich liked Pepsi very much, and negotiations began on direct supplies of soda to the USSR. In 1972, already under Leonid Brezhnev, Donald Kendall achieved a monopoly on the sale of the drink in the Soviet Union.
You give us soda, and we give you vodka
Thus, Pepsi became the first "product of capitalism" to hit the shelves of Soviet stores. At the time of the collapse of the Union, there were 21 American factories on its territory. The concentrate of the drink, the recipe for which was kept secret, was brought from the USA, and in the USSR it was diluted and bottled with branded labels.
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The uniqueness of the agreement lies in the fact that the ruble was not the currency of international settlement, and the parties agreed to barter. In exchange for soda, the USSR supplied the USA with Stolichnaya vodka.
Thanks to the Americans, Russian vodka became an international brand; it was sold annually in Europe and America for $ 200 million.
Deal of the century
The agreement with Pepsi was signed before 1989, and when it ended, General Secretary Gorbachev appealed to the Americans with a request to extend the supply. However, the situation changed, and the Western partners no longer suited the vodka for exchange for soda concentrate. The Soviet leadership proposed a new barter. In exchange for the Pepsi syrup, the USSR agreed to give a fleet of diesel submarines.
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The Americans were satisfied with this, and they issued a new batch of sweet syrup. In total, the USSR transferred 17 project 613 submarines, built between 1951 and 1957. All weapons were removed from them. The first batch also included a frigate, a cruiser and a torpedo bomber. PepsiCo sold submarines and ships for scrap. Each submarine brought the corporation $ 150.
Consumption defeated weapons
The submarines were all obsolete and decommissioned, but there was more symbolism than business in this deal. Part of the mighty fleet of the USSR was scrapped in exchange for capitalist soda, which was dearer to the citizens and leaders of the country of developed socialism than the prestige of the country's armed forces.
Communism lost the fight against capitalism, and was defeated not with bombs and tanks, but with jeans, VCRs, Hollywood movies and Pepsi soda.
In 1991, when the USSR collapsed and capitalism came to the already independent republics, the treaty was terminated. PepsiCo Director Donald McIntosh Kendall, who was friends with Khrushchev and Brezhnev, received the Order of Friendship from the hands of Russian President Vladimir Putin in 2004.
