Based on this position, the leadership of the Southern Dairy Union sent a corresponding appeal to the Chairman of the Government of the Russian Federation Mikhail Mishustin with a request to exclude dairy products from the list of goods subject to mandatory labeling by means of identification.
The text of the appeal:
The government of the Russian Federation is working hard to overcome the consequences of the economic crisis and create conditions that are as favorable as possible for the development of businesses engaged in the real sector of the economy. To achieve a positive effect, the most important element is to eliminate excessive administrative barriers and economic pressure.
However, the introduction of mandatory digital labeling of finished dairy products, as well as the methods used in this regard, directly hinder the achievement of these goals and can create a crisis in the dairy industry, which threatens to turn into unpredictable economic and social consequences for the labor collectives of many enterprises in the industry.
The decision to include finished dairy products in the list of products subject to digital labeling is motivated by the need to introduce a traceability system for them and exclude the possibility of counterfeit dairy products circulation. At the same time, the problem of counterfeit dairy products circulation, i.e. the use of illegal packaging of someone else's brand or illegal evasion of excise duties, does not exist in the industry and is monitored by interested market participants themselves, and the share of such products is negligible. Using the existing capabilities of control and supervisory authorities can effectively solve the problem of stopping its turnover without introducing such drastic measures, which was also pointed out by the Chairman of the Council of Federations of the Federal Assembly of the Russian Federation V. M. Matvienko, who criticized the introduction of a mandatory system of digital labeling of dairy products.
Since 2018, all enterprises in the dairy industry of the Russian Federation have implemented the electronic veterinary certification system "Mercury", which, despite the ambiguity of evaluating its effectiveness, already fully fulfills the task of traceability of products "from field to counter". Significant funds have already been spent on its implementation by enterprises, and the refusal to use it by creating a much more expensive digital labeling system, which actually duplicates this task with minor changes, raises reasonable questions for enterprises about the appropriateness of the costs they have already incurred at the initiative of the state.
One of the reasons for the inexpediency of introducing digital labeling of finished dairy products is its excessive, and for a number of enterprises – an unbearable financial burden. In addition, if at the beginning of the discussion these costs were estimated only approximately, today, having a number of commercial offers from suppliers of labeling equipment and official integrators of the project, it is possible to objectively assess the amount of funding required. Therefore, only for the 21 enterprises of Krasnodar region that provided us with their calculations, the total production volume of which is about 70% of the total production of dairy products in Kuban, the cost of implementing the labeling system will be at least 1 billion 601 million and 813 thousand rubles. In addition, their annual expenses for labeling will additionally amount to at least 1 billion 116 million and 457 thousand rubles.
At the same time, despite quite a long time of discussion, development and implementation of mandatory digital labeling, there are still no proposed working models for its application and reading for most types of packaging used, as well as specific answers to the key question of how labeling will contribute to improving the quality and safety of dairy products.
Another important impact will be a significant increase in the cost of dairy products, which in turn will be reflected in an increase in budget expenditures at various levels for its purchase for state and municipal needs, as well as a decrease in the competitiveness of Russian exports.
Article 8 of Federal law No. 247-FZ of July 31, 2020 "On mandatory requirements in the Russian Federation", which has entered into force, provides public discussion of draft regulatory legal acts establishing mandatory requirements. The feasibility assessment is included in the concept of introducing digital labeling, and in the Decree of the Government of the Russian Federation. However, decisions on the introduction of mandatory digital labeling are made without this objective assessment and its public discussion. Any opposition to the industry in this matter by the structures interested in its implementation is presented as a simple unwillingness to establish control over the production and circulation of dairy products. The arguments of the industry about logistics and practical challenges that are insurmountable for it are obviously not taken into account.
In fact, the price of introducing digital labeling of finished dairy products may be the degradation of the industry and the refusal of a number of dairy enterprises from this business area due to the inexpediency of its further introduction. Today, such intentions are widely expressed by a number of representatives of small and medium-sized businesses.
Currently, in the context of the crisis caused by the pandemic and a significant decrease in consumer demand due to the devaluation of the Russian currency, dairy enterprises are experiencing significant difficulties and need specific state support to help them overcome them.
We believe that such an expensive solution as mandatory digital labeling, which does not bring any obvious benefits to dairy producers and consumers, but only increases their production costs and financial burden in this situation, is simply premature and unacceptable.
In their appeals to the Prime Minister of the Russian Federation, heads of several regions: the Republic of Adygea M.K. Kumpilov, the Republic of Crimea S.V. Aksenov and Tatarstan R.N. Minnikhanov, have requested amendments to the paragraph 11 of the decree of the Government of the Russian Federation № 792-R dated 28.04.2018, and exclusion of dairy products from of the list of goods subject to mandatory labeling.
In connection with the above, as well as clearly understanding the complexity of the situation in the Russian dairy industry, we join the position expressed by the heads of regions, and also consider it necessary to amend paragraph 11 of the decree of the Government of the Russian Federation No. 792-R dated 28.04.2018 on excluding dairy products from the list of goods subject to mandatory labeling by means of identification, taking into account the unrealized possibility of improving the Mercury system.
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