From the date of a meeting held on January 30, 2020 at the Ministry of Agriculture, reports have been coming on the possible plans of the Moscow cheese processing factory KARAT (the producer of Druzhba and Yantar processed cheese, highly popular with Russian consumers) on the transfer of some of its manufacturing facilities from Russia to Belarus in case of introduction of obligatory marking of dairy products.
As it follows from the minutes of the meeting at the Ministry of Agriculture, Evgeny Grebnev, head of the factory, said that the company will not be able to install marking equipment at all of its production units. It will be necessary to fit out 14 of the factory’s 16 manufacturing lines with marking machines. Moreover, it is impossible to place additional equipment on two lines.
According to the document, if the marking becomes mandatory, KARAT may transfer the production to Belarus. It has been specified that the plan concerned a possible start of production of Violette cream cheese in the neighboring country. This is due to the fact that modernization of production lines is not possible.
Grebnev is confident that the Russian dairy market does not need labels as the volume of counterfeit produce is less than 1%. It should be noted that the estimates of the counterfeit dairy products on the market mentioned by Grebnev, are very different from official statistics. After examining the Russian dairy products market earlier, the Federal Service for Surveillance on Consumer Rights Protection and Human Wellbeing (Rospotrebnadzor) came to the conclusion that last year, one dairy product in each five was counterfeit. At the same time, according to the results of the inspection, in 2018, one dairy product in five (21.6% of the total) had variances with the list of ingredients indicated on the packaging and, therefore, was considered falsified.
Due to the introduction of the labeling system, producers face a serious problem, which will add to the existing financial costs. According to KARAT's estimates, which were given by its CEO, re-equipment of one production line will cost €120,000.
The Center for Development of Advanced Technologies, which is responsible for marking, disagrees with Evgeny Grebnev. The center’s experts say that there are three ways to meet the labeling requirement: in addition to printing codes on the production line at the factory, the manufacturer can also order the necessary marks from the printing office or attach the labels to the finished products.
According to the Center for Development of Advanced Technologies, the last two options do not require re-equipment of production lines, and therefore they are likely to be the most popular among manufacturers.
Later, Grebnev said in an interview with the media that KARAT was not considering the possibility of production relocation, and the media had plucked his words out of context. He also complained about the incorrect minute-taking. According to Grebnev, he asked whether the introduction of the marking was an attempt to push the company to transfer its production to other countries.
It should be recalled that labeling of certain types of dairy products should become mandatory as of June this year. As of July 15, 2019, it is implemented as an experiment which is to be completed in February. However, the Ministry of Industry and Trade offered to extend it until May 31. At the same time, the introduction of mandatory labeling is scheduled for June 1 this year.
Currently, the participants in the experiment are giving a negative assessment to its progress. Representatives of factories have previously stated that they are not ready to implement the marking system requirements, and they insisted on the revocation of the initiative or extension of the experiment.
The Ministry of Agriculture said in its turn that it is carefully working on the manufacturers’ proposals. However, the agency notes that so far, the introduction of labeling system has not caused closures or transfers of production in none of the industries where marking has already become mandatory.