Details: Mandatory labelling of dairy products may provoke conflict in EEU
<p> MINSK, Nov 17 - PrimePress. The Council of the Eurasian Economic Commission (EEC) reached an agreement in September 2020 to postpone the mandatory labelling of some types of dairy products in the Eurasian Economic Union (EEU: Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia) from January 2021 until the EEU members are ready for that. </p> <p> </p> <p> As reported in November, Russia, which initiated the labelling, postponed its introduction at the national level from January 2021 to May 2021 again at the request of dairy producers. </p> <p> </p> <p> Deputy Minister of Industry and Trade of Russia Viktor Yevtukhov spoke about phased introduction of labelling: on a voluntary basis from January 20, 2021; mandatory from May 1, 2021, and from May 1, 2023 onward to the full traceability of each item. </p> <p> </p> <p> Russia is going to introduce mandatory labelling of cheese, butter and ice cream from May 1, 2021; milk and cream with a shelf life of over 28 days, buttermilk, coagulated milk and cream, yogurt, kefir, milk whey, cottage cheese, young cheese and sour cream from July 1, 2021; milk and cream with the shelf life of and below 28 days, milk and cream condensed or with sugar and soft drinks containing milk fat from October 1, 2021. </p> <p> </p> <p> Traders will have to report dairy sales data through cash registers from October 1, 2021. Producers and distributors will be required to provide information on the movement of goods (names and quantity) from May 1, 2022. Information on the movement of each item will be transferred to the labelling system from May 2023. </p> <p> </p> <p> Russian producers may be reimbursed for labelling cost </p> <p> </p> <p> Russian producers begin to freeze investments in equipment and prepare money for the purchase of labelling equipment, software, etc. The Russian National Union of Milk Producers (Soyuzmoloko) estimates the costs in the first year at 61.3 billion rubles, and the annual costs of the industry at RUB35.2 billion. </p> <p> </p> <p> If not reimbursed, they would raise prices to cover the digital product labelling costs. According to the Moscow Chamber of Commerce and Industry, production costs would go up by 10% at large companies and by 20% at medium and small ones. </p> <p> </p> <p> Therefore, Russia is mulling ways to minimize their expenses. The Russian Ministry of Agriculture proposes to partially reimburse direct labelling costs for dairy producers and provide soft loans, and exemption from customs duties and VAT on imported equipment. </p> <p> </p> <p> EEU members to be forced to label diary after Russia </p> <p> </p> <p> The EEU framework agreement on the identification labelling came into force on March 29, 2019. It determines the procedure: either in the entire Union, or at the national level. </p> <p> </p> <p> Each member state may introduce the labelling of any group of goods on its territory, which may differ from the requirements set by other states. However, if Russia did this, the others would have to introduce similar requirements to eliminate mutual trade disruptions and protect their markets from unlabeled products. </p> <p> </p> <p> Belarus’ government not considering reimbursement </p> <p> </p> <p> Belarus is not thinking about any reimbursement, having no money for that, and tries to prevent the introduction of the labelling in the EEU, which seems to be impossible. </p> <p> </p> <p> The EEU Business Council has estimated the cost of re-equipment at Belarusian dairy processing companies for the labelling at Br41.4 million ($16.2 million at the rate of the National Bank of Belarus). The annual spending on the labelling codes will range from Br63 million ($24.6 million) to Br102.4 million ($40 million). Dairy prices would increase by 9%. </p> <p> </p> <p> Belarusian producers may lose positions on major export market </p> <p> </p> <p> If the Russian Federation decided to support its producers, this would create unequal conditions in the EEU dairy market, hitting first of all Belarusian and Kazakh producers. This would be similar to the effects of the tax maneuver in the Russian oil industry. </p> <p> </p> <p> The Russian Ministry of Finance said earlier in response to Belarus’ objection that this would be in contrary to Russia’s sovereign right to pursue its domestic policy, and suggested that Belarus adopted the Russian Tax Code. Moscow can repeat this suggestion now. </p> <p> </p> <p> Cheese, butter, whole milk products and milk powder dominate in Belarus’ dairy exports. Russia is the main export market for Belarus, accounting in January-August 2020 for 94% of the export of cheese, 92.4% of butter, 58% of condensed and powdered milk and cream, 95% of non-condensed milk and cream (all in monetary terms). End (Br2.56/$1) </p>
2020-11-18
Primepress
MINSK, Nov 17 - PrimePress. The Council of the Eurasian Economic Commission (EEC) reached an agreement in September 2020 to postpone the mandatory labelling of some types of dairy products in the Eurasian Economic Union (EEU: Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia) from January 2021 until the EEU members are ready for that.
As reported in November, Russia, which initiated the labelling, postponed its introduction at the national level from January 2021 to May 2021 again at the request of dairy producers.
Deputy Minister of Industry and Trade of Russia Viktor Yevtukhov spoke about phased introduction of labelling: on a voluntary basis from January 20, 2021; mandatory from May 1, 2021, and from May 1, 2023 onward to the full traceability of each item.
Russia is going to introduce mandatory labelling of cheese, butter and ice cream from May 1, 2021; milk and cream with a shelf life of over 28 days, buttermilk, coagulated milk and cream, yogurt, kefir, milk whey, cottage cheese, young cheese and sour cream from July 1, 2021; milk and cream with the shelf life of and below 28 days, milk and cream condensed or with sugar and soft drinks containing milk fat from October 1, 2021.
Traders will have to report dairy sales data through cash registers from October 1, 2021. Producers and distributors will be required to provide information on the movement of goods (names and quantity) from May 1, 2022. Information on the movement of each item will be transferred to the labelling system from May 2023.
Russian producers may be reimbursed for labelling cost
Russian producers begin to freeze investments in equipment and prepare money for the purchase of labelling equipment, software, etc. The Russian National Union of Milk Producers (Soyuzmoloko) estimates the costs in the first year at 61.3 billion rubles, and the annual costs of the industry at RUB35.2 billion.
If not reimbursed, they would raise prices to cover the digital product labelling costs. According to the Moscow Chamber of Commerce and Industry, production costs would go up by 10% at large companies and by 20% at medium and small ones.
Therefore, Russia is mulling ways to minimize their expenses. The Russian Ministry of Agriculture proposes to partially reimburse direct labelling costs for dairy producers and provide soft loans, and exemption from customs duties and VAT on imported equipment.
EEU members to be forced to label diary after Russia
The EEU framework agreement on the identification labelling came into force on March 29, 2019. It determines the procedure: either in the entire Union, or at the national level.
Each member state may introduce the labelling of any group of goods on its territory, which may differ from the requirements set by other states. However, if Russia did this, the others would have to introduce similar requirements to eliminate mutual trade disruptions and protect their markets from unlabeled products.
Belarus’ government not considering reimbursement
Belarus is not thinking about any reimbursement, having no money for that, and tries to prevent the introduction of the labelling in the EEU, which seems to be impossible.
The EEU Business Council has estimated the cost of re-equipment at Belarusian dairy processing companies for the labelling at Br41.4 million ($16.2 million at the rate of the National Bank of Belarus). The annual spending on the labelling codes will range from Br63 million ($24.6 million) to Br102.4 million ($40 million). Dairy prices would increase by 9%.
Belarusian producers may lose positions on major export market
If the Russian Federation decided to support its producers, this would create unequal conditions in the EEU dairy market, hitting first of all Belarusian and Kazakh producers. This would be similar to the effects of the tax maneuver in the Russian oil industry.
The Russian Ministry of Finance said earlier in response to Belarus’ objection that this would be in contrary to Russia’s sovereign right to pursue its domestic policy, and suggested that Belarus adopted the Russian Tax Code. Moscow can repeat this suggestion now.
Cheese, butter, whole milk products and milk powder dominate in Belarus’ dairy exports. Russia is the main export market for Belarus, accounting in January-August 2020 for 94% of the export of cheese, 92.4% of butter, 58% of condensed and powdered milk and cream, 95% of non-condensed milk and cream (all in monetary terms). End (Br2.56/$1)