Moscow’s infamous Cherkizon market rises from the ashes

Moscow’s infamous Cherkizon market rises from the ashes
By Jason Corcoran in Moscow September 2, 2016

Moscow’s notorious “state within a state” Cherkizon market has risen like a phoenix from the ashes in new, modern premises to the south of the capital, after working some elite connections that reach right into the Kremlin.

The vast complex, also known as Cherkizovsky, was sensationally closed in June 2009 for so-called “sanitary and safety violations”. Billions of dollars in contraband goods were confiscated while about 100,000 workers – many of whom were illegal immigrants – were left jobless. Three years earlier, the market literally went up in smoke after a large bomb brought down a two-storey building, killing 11 traders and injuring a further 55, mostly Asians.  

Huge crowds of bargain hunters once flocked to Cherkizon looking for everything from food and cheap clothing to electronics and carpets. Some 5,000 buses with traders and goods arrived at the chaotic bazaar every day from all over the country. Alexander Bastrykin, Russia’s powerful chief prosecutor, once described the market as “a state within a state” with its own laws and its own police force to rule over a mixed workforce consisting of Chinese, Vietnamese, Central Asian immigrants and some Russians. The Chinese government even sent a delegation to Moscow to lobby for 10,000 traders who had lost jobs and revenues. However, in the days prior to its closure in 2009, Bastrykin described the market as a disgrace, accusing the premises of even housing brothels and an underground casino, and its fate was sealed.

But the closure was linked to a political push against its owner Telman Ismailov, involving a row between Ismailov and his fellow Azeri partner Zakhar Iliev over the land occupied by the market. Ismailov, who had been close to Moscow’s ousted Mayor Yuri Luzhkov, infuriated President Vladimir Putin for lavishing $1bn on a new Turkish resort during a recession back home in May 2009. For the opening party of the Mardan Palace, Ismailov jetted in Hollywood actors Sharon Stone, Richard Gere, Mariah Carey, Paris Hilton and singer Tom Jones. At one point, Ismailov danced as $100 bills came fluttering down from the ceiling.

Now, Cherkizon has come back to life albeit in a more sanitised format. Food City is owned by Iliev and his and his partner God Nisanov, who were both part owners of Cherkizon. However, Ismailov is well out of the picture, having been declared bankrupt in December with unpaid loans of about $300mn.

Real estate sources suggest that Iliev and Nisanov’s success and the speed of the rezoning of the land at Food City is down to their friendship with Ilgam Rahimov, one of Putin’s closest friends. An investigation by Forbes Russia magazine in 2012 said Rahimov and Putin had been classmates and friends in the Law Faculty at the Leningrad State University. Putin had stayed in Rahimov’s dorm room and they had sparred together at judo.

Dmitry Peskov, Putin’s spokesman, confirmed that Putin had been friends at university with Rahimov, whom Forbes listed with a net worth of $2.5bn. Rahimov keeps a low profile and is a lecturer in law at universities in Azerbaijan and a partner in a small law office in Baku, according to Forbes.

Together, Nisanov and Iliev own a number of other high-profile assets in Moscow, including the historic Ukraine hotel and a flotilla of luxury boats on the Moscow river. Rahimov is reported to own a slice of the same assets and may even have a share in Food City. Unlike their countryman Ismailov, Nisanov and Iliev aren’t prone to hosting flash parties or advertising their wealth. In July 2014, Nisanov was awarded by Putin with the Order of Friendship at an official ceremony in the Kremlin

Gangland style

On a recent trip to Food City, traders told bne IntelliNews that the business is organised just like Cherkizon with rackets and protection run by rival criminal groups. “Food City is managed by its own internal mafia structure,” claimed one trader, who declined to be named. “Moscow’s cops never come here and are not allowed to due arrangements that have been made.”

Indeed, the vast complex is patrolled indoors and outdoors by hundreds of black-uniformed ohkraniki [security guards] brandishing walkie-talkies. bne IntelliNews had to talk to traders and clients surreptitiously after being denied permission to interview anyone in the market.

“Food City is much better than most markets still left in the city,” said fruit trader Kurbon, who is originally from Tajikistan. “It’s modern and cleaner, but, more importantly, we never get shaken down by the police and hassled about our documents because they can’t come in.”

The complex, which opened almost two years ago, is located 25km to the south-west off the Kaluga highway and beyond Moscow’s third ring-road, known as MKAD. The concept is meant to ape the best international practices of the renowned Rungis market in Paris, as well as Mercado San Miguel in Madrid.

It combines wholesale and retail markets and supplies major supermarket chains, such as Perekrestok and Dixy, as well as restaurants and cafes. About 70% of all construction is complete in Food City, with plans for a hotel to open soon as well as office space.

However, the lion’s share of fruit and vegetables seems to be sold outdoors on battered pallets under tarpaulins and stacked up between the warehouses and the main buildings. Huge electricity pylons tower over much of the produce, which was subjected to hot sunshire, dust, grime and exhaust fumes from the passing traffic.

More to come

The sprawling complex, covering over 91 hectares, isn’t as big as the Byzantine Cherkizon once was, but there are advanced plans for more of these markets. Moscow Mayor Sergei Sobyanin is pushing for the creation of three more agro-clusters and a second Food City has already been earmarked for a plot near Domodedovo, the capital’s second-largest airport.

The market is a key part of Putin’s food substitution drive after the Kremlin banned many Western foodstuffs as a counter-measure to sanctions over Ukraine. Russia, the world’s ninth-biggest food importer in 2013, has made some progress stimulating its agricultural sector and last year cut its overseas food purchases by 40% to $26.5bn, according to government data.

Leasing space in a warehouse is not the only way to work at the market. Farmers can sell their products directly by availing themselves of the cross-docking facilities, where food and vegetables were on sale outdoors for cheaper prices. Food City has 2,000 parking spaces for cargo vehicles, 6,000 spaces for cars, as well as plans to connect the complex to the city’s metro underground railway network.

The market is the biggest supplier of smoked, frozen and live fish, with 52 aquariums holding fish from suppliers in Murmansk, Astrakhan, Crimea, Belgorod, Tunisia, Morocco and beyond.

Even with Russia’s drive to stimulate self-sufficiency in food, shoppers can feast on grapes from Egypt and apples from Argentina. Stalls and pavilions feature produce from as far afield as Iran, Syria and Mexico. The Iranian pavilion proudly displays beautiful Persian rugs, while the Syria Trading House offers a range of products, including several types of baklava, traditional sweets, tea, coffee, olives, olive oil and sesame paste.

In the extensive food court – which features an array of delicious-looking Asian cuisine – diners can listen to a Babylonian mix of languages. In fact, we were some of the few European-looking people sitting down for lunch. Women with hijabs hustled about the nearby pavilions while two men in the mens’ toilets scrubbed their feet in the hand basin.

A large number of pavilions lay empty on our visit during midday on a hot summer’s day, while most vendors drank tea and chatted with one another due to a lack of customers. But the laid-back atmosphere belies the sense of behind-the-scenes menace at Cherkizon. One forklift driver from Central Asia said he was afraid to talk to outsiders, but let slip enough to paint a picture of criminality, intimidation and fear.

“It's like a big prison here,” he said. “Everyone is spying on one another and stealing, but everyone knows who is the boss.”

Photos by Todd Prince