Dairy Union of Kazakhstan: Labeling is an unnecessary initiative that the consumer pays for
The expert believes that digital labeling has only disadvantages. In his opinion, they consist in the large size of capex, the need to purchase QR codes, the inevitability of logistical problems associated with the transportation of products to retail outlets, as well as in reducing the speed of production lines due to the need to install additional equipment for marking.
Dinmukhamed Aysautov noted that there is no need to introduce digital labeling, since, due to the lack of economic sense, there is minimal amount of falsified goods in the dairy industry.
- And accordingly, this cost will fall on the shoulders of customers who do not consume the daily norms of dairy products recommended by the World health organization in sufficient quantities. So people will buy even less milk and dairy products. They will go to markets or bazaars where there is no veterinary and sanitary control. Consuming such milk, the buyer has the risk of buying a product with a high content of antibiotics, somatic cells and other dangerous substances that negatively affect human health, - said the representative of the Dairy Union of the Republic of Kazakhstan.
The expert supposed that the introduction of mandatory digital labeling may be a positive process only for the Ministry of Finance. This will help you keep a better record of product turnover and allow you to forecast tax revenues, as well as reduce counterfeit goods. Dinmukhamed Aysautov repeated that there is almost no counterfeit in the dairy industry, accounting for less than 1% of the mathematical error.
A representative of the Dairy Union of the Republic said that Kazakhstan has tracking systems already. For example, monitoring of raw materials by the Ministry of agriculture, introduction of accompanying invoices for goods, supervision by the Committee for quality control, safety of goods and services (similar to Rospotrebnadzor).
- The introduction of labeling is simply an expensive duplication of existing control mechanisms, so we do not need it at all. I think Soyuzmoloko holds a similar position in Russia. This is an increase in cost, unnecessary risks associated with a drop in the capacity of production lines. This will affect logistics and especially small and medium-sized businesses. Small stores will have to buy scanners in order to read DataMatrix. This is an additional cost for them. Kazakhstan has already been forced to purchase cash registers with Internet access. This cost small and medium-sized businesses a lot of money. Now we will need to buy additional scanners, which are also not cheap. The consumer will eventually pay for these unnecessary initiatives, said Dinmukhamed Aysautov.
He said that mandatory labeling of dairy products in Kazakhstan has not been introduced yet. The pilot project started on October 2 this year and has not been fully operational yet. When mandatory digital labeling of dairy products is introduced in 2021, although the exact dates are not known yet, experts estimate that goods will rise in price fr om 10 to 15%.
Dinmukhamed Aysautov added that, in general, the increase in the cost of dairy products is influenced by many factors. Both raw material prices and the rapid devaluation of the local exchange rate against the dollar, which makes imported components such as packaging or starters purchased with strong currency more expensive.
- In addition, there is an obvious shortage of milk in Kazakhstan. We have about 70-75% of all milk produced in private farms, and the products from there are not of very good quality. We get only about 20% from organized large farms. In other words, we are seeing a shortage of high-quality milk for processing. We export mainly to the border regions of the Russian Federation, and we estimate that it is less than 6%. In general, fresh milk is a product that is consumed wh ere it is produced, Dinmukhamed Aysautov concluded.
Earlier, we wrote that prices in Kazakhstan may rise by another 10%, as total labeling of dairy products is introduced as part of integration with the EEU. This was reported by kazlenta. Kz with reference to energyprom.kz.
Also, referring to a Kazakh source, we reported that in Russia, due to labeling, which will be introduced since January 20 next year, dairy products will rise in price by 4.5-5.5%. In Kazakhstan, prices will increase even more, since the domestic market is smaller than the Russian one. In this regard, the cost of labeling a unit of production will be higher.
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