MAY 21, 2005
More about Mr Tariko
Roustam Tariko, the man who is tipped to be on the verge of buying the Jordan F1 team is unusual for the modern Russian rich in that his empire is not based on one of the old Soviet industries which were privatised after the break up of the old system of government. Tariko, who comes from the area which has since become Tatarstan, a small republic in the middle of the Russian Federation, has built his empire from humble beginnings, starting out working for a cooperative that provided transportation services to foreign visitors. He made his first serious money by acting as an intermediary between the Russian government hotel booking agency Intourist and an Italian travel company. This led to a deal with the chocolate company Ferrero (which owns the Ferrero Rocher, Tic Tac and Nutella brands) to import their products into the opening Russian market. This led to an approach from Martini & Rossi which was looking to expand its sales in Russia. The initial deal was for a truckload of Martini which Tariko sold to the Russian elite for $50 a bottle. It was such a success that he was signed up as Martini's exclusive Russian importer and by 1994 the company had boomed and was importing 90 different brands including Smirnoff, Johnnie Walker, Bacardi, Gordons, Veuve Cliquot and Krug. These were sold at premium prices to Russia's new rich. By 1998 Tariko had become the largest Martini importer in the world.
He then decided that the company could always be at the mercy of the foreign firms and decided that he would start his own brand, which would have a range of products and would have a strong Russian identity. Working with the McKinsey consulting firm, he developed the strategy by establishing Russian Standard vodka.
"If you want to sell products to Russians you have to look to the past," he says. "You need to understand who they are, what they will reject and what they will buy. The messages we have been communicating to consumers are based on Russian traditions."
The strategy was to have one of Russia's oldest distilleries produce the vodka for Russian Standard and aim for the high-end of the market, pricing it cheaper than the important brands but much more expensive than the other Russian products. This created a glitzy image and big profits as the country's new wealthy aspired to luxury brands.
The next step was to move into finance with the purchase of a bank after the 1998 financial crisis. He hired executives from other banks and moved into consumer finance, while also providing funding for major international firms in the uncertain Russian market. Russian Standard vodka has since begun to expand internationally and a move into Formula 1 would be a logical step given the brand philosophy and target markets of the company. There is no shortage of money as Tariko's empire is believed to be worth around $870m.
Tariko's success has only one blemish, a failed online business during the Internet boom.
It is worth noting that Tariko is not the only wealthy Russian in town for the Monaco Grand Prix with oligarch Roman Abramovich due on Sunday and aluminium magnate Oleg Deripaska, the country's youngest billionaire (Abramovich's former partner in the RusAl company) also sniffing around F1. RusAl has annual sales of $4bn and Deripaska owns 75% of the business. Another man worthy of mention is Rustam Tergulov of the Vizavi Bank.
While the Russians and Hollywood types have been making the headlines in recent days, the richest man in the paddock is probably a soft spoken American called Rob Walton, the son of Wal-Mart founder Sam Walton, who now runs the vast American retailing company, which is expanding fast in Europe at the moment. Wal-Mart has annual sales of $250bn and the Walton Family is as rich as Bill Gates and Warren Buffett combined with an estimated fortune of $90bn between the five of them. The company's dividends to the family alone are worth $880m the Waltons. Rob Walton is chairman and chief executive of the business, which he has worked for since 1969 and which he has run since 1992. Walton is a great car fanatic and competes on a regular basis in historic events.
It will be interesting to see whether Wal-Mart might become involved in F1. Walton spent his time at Red Bull Racing.
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