A copy-cat McDonald's and fake designer handbags: How store closures and luxury goods export bans could lead to a rise in rip-off brands and counterfeit products in Russia

• Luxury goods export bans could give rise to the counterfeit market in Russia, one expert says.
• Russian authorities may turn a blind eye to these products so that consumers don't feel deprived.

It's becoming increasingly difficult for Russians to buy foreign brands' products in their own country.

Over the past few weeks, dozens of retailers have closed shop in Russia, and export bans on luxury goods will make it harder for consumers to get their hands on expensive cars, art, and designer handbags produced in the US, UK, and EU.

While the intention of the latter is to deprive the country's elite – and often Putin's allies – of the world's most luxurious products, it could end up giving rise to a counterfeit market or lead to more gray market goods – items that are sold outside the manufacturer's official distribution networks – circulating in Russia, Robert Lands, a lawyer at Howard Kennedy who focuses on intellectual property law, told Insider.

"The Russian government is going to want to do everything so that people don't feel deprived," he said. "I think it'll turn a blind eye to grey market goods and possibly fakes so that consumers don't get too upset because they can't get the products they were used to getting ... Once the authorities stop enforcing these things, they'll just flood in."

For luxury brands, this has other long-term consequences in that it cheapens their brand image and makes it more difficult to re-establish themselves in the Russian market in the future. According to Bernstein analysis, Russia accounts for around 5% of global luxury market sales. That includes Russian consumer spending at home and abroad.

"The consumer's perception of your goods has changed and of course, those who like buying the fakes and don't see a problem with it, would then not want to pay the higher price," Lands said.

For other western brands, there's a growing risk that pulling out of Russia could lead to copy-cat versions cropping up in their place.

McDonald's is already facing such a challenge. This month, a Russian fast-food chain called Uncle Vanya filed to trademark a logo that bore an uncanny resemblance to McDonald's golden arches. The trademark was filed after Vyacheslav Volodin, the speaker of Russia's parliament, had suggested that the brand should replace McDonald's in Russia, Insider's Alex Bitter reported.

Lands said that Russian authorities could approve trademarks of this kind in retaliation to Western sanctions, and there's not a lot that Western brands could do if it did happen.

And, long-term, it could make it harder for McDonald's to reopen stores in Russia, he said, as consumers get used to the new brand or are confused about which one is actually McDonald's.