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Bloomie’s Wins Soviet Bread War

May 24, 1989 GMT

NEW YORK (AP) _ In what could have been a sequel to ″Moscow on the Hudson,″ New Yorkers formed bread lines on Wednesday to buy loaves of real Russian rye flown in from the Soviet Union.

″We’re selling it at a rate of one loaf every two minutes; right now, the line is very long,″ said Miraed Peake Smith, spokeswoman for Bloomingdale’s, where 1,100 loaves arrived Tuesday night.

″One person came in and bought 14 loaves,″ she said. Among the buyers were employees from the Soviet mission to the United Nations.

″The bread is good. It’s not a gimmick,″ Ms. Smith said. ″But Americans also seem to be fascinated with Russian items.″

Yes, but they’re still Americans, and any resemblance to Moscow ends at the rear of the bread line. Competition broke out before the bread had even arrived in the United States, and a chain of bakeries is already planning to undercut Bloomingdale’s price - a hefty $6 for each two-pound loaf.

The dense bread was made in Moscow on Sunday, shipped Sunday night, arrived Monday via Aeroflot, underwent federal inspections and arrived at Bloomingdale’s on Tuesday.

″That’s what we’re planning to do every week, assuming it continues to sell well,″ said Ms. Smith.

Two varieties are offered from Moscow’s Factory No. 10: Rjanog, a sour rye, recommended with Russian tea, and Borodinsky, a sweeter bread with coriander seeds. They stay fresh three to four days in a regular bread box and will ″last forever″ when frozen, Ms. Smith said.

Millionaire entrepreneur Fred Kayden, 58, struck the deal that brought the ″peace bread″ to Bloomingdale’s, the Waldorf-Astoria hotel, the Russian Tea Room and the Rye Town Hilton (which wasn’t renamed for the bread; it’s in the town of Rye just north of New York City).

When Kayden announced the import plan in March during a taste-test at the Waldorf, he said it would be sold at 15 Zaro’s Bread Basket stores in the New York area.

Therein lies the capitalist rub.

Kayden and Zaro’s had a falling out. Stuart Zaro, president of the New York bakery, said it was over money. Kayden was vague about the reasons, but said his talks with Mosinter, an economic association of the Moscow City Council, had bogged down because of the Soviet bureaucracy.

Zaro’s made its own contract with Mosinter. Kayden stopped negotiating with that agency and quickly made a deal for Bloomingdale’s through International Farm Products, a new Soviet-West German venture run by ″one of the new breed of perestroika entrepreneurs.″

″It’s an interesting metaphor for the future. I negotiated 7 1/2 months with the Moscow bureaucracy and in 7 days I made a deal with a Soviet entrepreneur,″ said Kayden.

Zaro said the Soviets have promised him 2,000 loaves on Saturday. He’ll sell it for $1 less than Bloomingdale’s.

″Let’s see what happens Saturday; I don’t see how it will get through,″ said Kayden. ″The bottom line is that the Russian black bread is sitting in Bloomingdale’s now.″

Both retailers said they’ll seek more deals with the Soviets.

Kayden said he was working on more imports for Bloomingdale’s - he wouldn’t give specifics. Zaro said his father, Philip, who is company chairman and Kayden’s next-door neighbor, will leave for Moscow on Tuesday to discuss selling a product or opening a store there.

The competitors also will have a product name in common: ″peace bread.″

″It has nothing to do with what went on between us and Kayden,″ said Zaro. ″It obviously is referring to the two nations.″