A year for labeling. How did the dairy industry react to the government's resolution

Источник: The DairyNews
On November 8, Russian Prime Minister Dmitry Medvedev signed a decree according to which since December 1, 2020, the circulation of finished dairy products without labeling will be banned. At the same time, the labeling will become mandatory since June 1 the same year. Earlier, we wrote about the possible problems that the industry may face in case of the launch of the system of labeling of finished dairy products, but the discourse was somewhat different - the initiative was seen as an experiment, nothing more. In case of failure, the experiment can be canceled.

Now there is a clear resolution setting the actual date of introduction of the system, as well as the date when unmarked products will be banned. And this is before the end of the labeling experiment, which will last until March. What does the industry think? Read the review of The DairyNews.

Experiment 

The experiment on labeling of finished dairy products began on July 15, 2019. Certain types of dairy products, such as milk, cream, fermented dairy products, cheeses, etc., began to be labeled. The operator of the labeling is the Center for the advanced technologies development, working directly with three dozen companies that volunteered to test the labeling system "Honest mark" for themselves. The experiment was supposed to last until February 28, 2020, and during these six months the system had to prove its effectiveness. This time was given to the industry to find the best ways to integrate with the system. 

The government did not wait for the end of the experiment. Having taken away four months of work from the industry, the Cabinet of Ministers considered it necessary to define terms of start of system. Apparently, those thirty companies (their full list is still classified) managed to see the feasibility of labeling.  And this despite the fact that one of the flagships of milk processing in Russia – Danone - in October refused to participate in the experiment. The condition of the company was not to include dairy products in the next innovation of the industry - the system “Mercury”. However, since November 1, working in this system has become mandatory - and they did not want to integrate the two systems in Danone.

Here is how Charles Capetti, Head of Danone in Russia, explained the position of his company to RBC:

"If the government has decided to implement the system “Mercury”, we agree with it and implement it. But we think it would be wrong to load one category with two traceability systems". 

Later, "Soyuzmoloko", questioning the reliability of the results of the experiment, referred to the refusal of large processors to participate in the experiment:

"The largest Russian enterprises do not participate in the experiment, and the list of participants is kept in the strictest secret from the public. Reliability of results of such experiment raises serious doubts", - the portal Agroinvestor quotes "Soyuzmoloko". 

It is obvious that the situation in the industry is intense. Most questions are caused by justification of introduction of labeling in one year with expansion of EVC system "Mercury" on the whole range of dairy products which took place on November 1. How these systems are actually planned to be integrated is unknown to anyone.

What do the experts think? 

As expected, most of the industry experts note the absolute inexpediency of introducing a labeling system. Many attribute this to the high cost of the initiative for processors. At the same time, many people notice that the idea itself has a sound sence. But the implementation, as is often the case, is limping. And in our case on both feet – "Mercury" and "Honest mark".

According to Oleg Voronin, General Director of city dairy plant Liskinsky, the initiative has a number of positive aspects – in terms of traceability of products.

"In terms of traceability, there are positive aspects. But why do we need "Mercury" then? Since this system will require additional costs, it will definitely affect the consumer in the end. Therefore, there is no great logic in this initiative. If there was no "Mercury" - yes, the benefit could be. I think there must be one thing. We have not had time yet to work out the first system ("Mercury"), but we are already trying to make the second, which requires serious investment. This all will affect the consumer, and there are more negative moments than positive ones", said Oleg Voronin.  

Suren Obayan, General Director of JSC "Myasnikovsky dairy plant", has a similar opinion:

"This initiative is impractical. We already have one system ("Mercury"), where we are currently working. Of course, with reservations, with problems, but we are moving in our own direction. We do not see practical and theoretical meaning in the introduction of labeling. Moreover, it will significantly affect the cost of finished dairy products. The mechanism for the introduction of labeling implies investment and fixed costs, which will be reflected in the cost of finished products". 

The industry is also of the opinion that there are much more effective and less expensive ways to monitor the safety of dairy products. Ilya Ragozin, founder of the group of companies "Moloko Group» shared his opinion on the matter with a reporter of TheDairyNews:

"Why does no one care about more pressing issues - the classification of food, safety and quality? All attention is now diverted to the issues of labeling and "Mercury".  Meanwhile, the quality of products on the shelves can be ensured in very simple ways. It is necessary to introduce special regulations that determine the quality of products and how to classify them. It is possible to create a body on the basis of the Rossekhoznadzor that will control the quality of products through tests, identify the composition of the product and take measures against manufacturers", suggested Ilya Ragozin. 

Nikolay Arykov, CEO of Saratovsky dairy plant, sees the labeling as a danger to small businesses. According to him, it is possible to see logic in introduction of labeling only through combination with the system “Mercury”:

"These experiments will not lead to anything good. If the labeling is somehow combined with "Mercury", there is at least some logic in this event. All other options are nothing more than lobbying commercial interests of various structures. The labeling will not help the dairy industry in any way. It will not make dairy products more affordable or better. Everything will fall heavily on the cost price and will definitely kill small business". 

Alexey Martynenko, CEO of CJSC “Umalat”, noted that the labeling implies excessive control for the industry, which will harm both consumers and manufacturers:

"It will hit both consumers and producers. First of all, it will reduce the competitiveness of Russian production. This rule will also require very large funds and efforts in the future. The labeling system is nothing but excessive control for the industry, which has entered into a series of ineffective initiatives of our state".

Taras Kozhanov, Director of the farm "Lukoz Saba", noted that the industry has not been provided with clear arguments yet that the program is really designed to protect the market or improve dairy products. The farmer also noted that there are no real instructions on how to work in the SIS "Labeling" yet. Meanwhile, we will have to work in it since the beginning of summer: 

"It is extremely risky to sign the resolution before conducting comprehensive tests of this system. I see this as a big threat to the whole dairy industry. As a private enterprise, we do not see any clear arguments that the program is really designed to protect or improve the market. At the same time, it is obvious that all costs will be shifted to the consumer, and I am not sure that the consumer is ready for this. I have a lot of questions about this concept. 

Taras Kozhanov also noted that the remaining eight months will not be enough to understand all the nuances of working in the program: "For us, a year is a normal period for developing a software product. Judging by the resolution, we have only 8 months left, and I do not understand who will be the contractor, who we can work with on the introduction, who should carry out this amount of work. And I do not understand what the result will be for the consumer", - said Taras Kozhanov.

The biggest question is: what is the feasibility of introducing a system of labeling of finished dairy products at the same time as "Mercury"? Can’t one system exist without another, and in fact, if there is “Mercury”, why do we need another system? The explanations of the supporters of the system that it performs other functions look ridiculous – after all, labeling is not even the second traceability system in the food industry, but the fourth - after the USAIS (Unified state automated information system), documentary traceability from the Federal tax service and “Mercury”. We won’t be able to avoid duplication.

The rush with which the government is trying to push forward the labelling system is astounding. And it is not known whether this desire is really to protect the industry from falsified products, or whether the stars are lit again for someone's need.

Read more at © DairyNews.ru

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