Page 9 - Countertrade

Barter

Barter Transactions

Goods and/or Services

Seller Buyer
Goods and/or Services

Barter is the exchange between

two parties of goods and services
without recourse to a cash
transaction. It involves a single
contract that covers both
transaction flows and is by far the
oldest form of countertrade. Even

Roman soldiers were, on occasion,
paid for their services by offering
salt rather than currency.

It is often used to boost trade
between countries e.g.

In 1990, the Russian government
in a barter deal swopped vodka for
Pepsi syrup and bottling equipment
from the U.S. firm Pepsico Inc. The
objective was to double Pepsico’s
soft-drink sales in Russia, open
two-dozen new bottling plants and

launch its Pizza Hut restaurants in
the country's biggest cities. To
finance the expansion, Pepsico promised to increase its sales of
Russian Stolichnaya vodka in the United States and begin a new
venture selling and leasing Soviet-built ships abroad. The deal failed.
Nevertheless, Pepsico made another deal by taking 17 submarines, a
cruiser, a frigate, and a destroyer in payment for Pepsi products. In turn,