World meat industry news

The trading network "Magnit", the largest retailer in Russia in terms of the number of stores, announced the start of testing the gratuitous transfer of expired food products for socially vulnerable citizens based on hypermarkets and supermarkets in five cities: Tula, Krasnodar, Rostov-on-Don, Yelets (Lipetsk region) and Izhevsk (Udmurtia).

“Magnit launched the food-sharing program a year ago, in July 2022,” the company’s press service told Agroinvestor. - The project was deployed in Moscow and then in St. Petersburg on the basis of dark stores - "stores without customers" for the collection of online orders. During this time, the company donated 173 tons of food to the needy and helped 92 thousand people. At the same time, in addition to basic goods (bakery, groceries, etc.), food sets also include vegetables and fruits - about 300 items in total, excluding products of animal origin.”

Business and public organizations have been discussing the topic of food sharing for more than a year. The ability to use end-of-life products for social support, instead of waiting for them to spoil and have to be disposed of, looks very attractive. And the potential of this direction, according to analysts, is huge. Thus, the TIAR-Center analytical agency estimates that almost 18 million tons of food is thrown away in the country every year. Of this volume, 29% falls on retail and public catering. In the presence of developed foodsharing, 3.6 million needy citizens of the country could receive about 50% of the required daily ration for free.

Public organizations and volunteers were the first to solve the problem of saving edible products from disposal in Russia. Today, there are several types of food sharing services in the country. For example, food banks (they accumulate and distribute significant amounts of food to charities); volunteer projects that collect food from cafes, canteens and shops and distribute it to interested consumers; regional groups in social networks, created on the principle of "give away for free", where ordinary users share their leftover food.

“Rus Food Bank has been engaged in food sharing for more than 10 years,” says Anna Aliyeva-Khrustaleva, vice president of the charity fund. “Today we carry out 90% of food sharing in the charitable sector: we work with the largest manufacturers, retail chains, agricultural enterprises and catering. In 2022, we launched agro-food sharing: we take surplus crops from agricultural enterprises and give them to those in need. Last autumn alone, we redistributed more than 560 tons of vegetables and fruits thanks to agrofood sharing. We help an average of 1 million people a year in 60 regions of Russia.”

The Magnit retail chain became a partner of Food Bank Rus last year. Volunteers of the charitable foundation pick up expired products every day from Magnit dark stores in Moscow, the Moscow Region and St. Petersburg. Products are double checked by Magnit employees and then by volunteers to make sure the products have sufficient remaining shelf life and are fit for consumption. On the same day, volunteers donate food to beneficiaries who live nearby. Aliyeva-Khrustaleva believes that the launch of food sharing based on Magnit stores in several more regions will accelerate the scaling of the project and increase the popularization of this direction. “This means that more people will receive food aid, and good food will not turn into waste,” she concludes.

Being an effective tool in the implementation of social policy, environmental protection, and the formation of a responsible attitude to food, the practice of food sharing has been promoted for several years, mainly by public organizations and volunteer movements, without becoming common for food retail and catering networks. The fact is that for the active development of the direction there are several serious obstacles that cannot be solved without involving the authorities.

Andrey Karpov, Chairman of the Board of the Russian Association of Retail Market Experts, explains that in the current legislative field, it is more profitable to throw away food than to give it to those in need. Large retail chains, being engaged in foodsharing, incur additional costs. Products with an expiring shelf life must be accumulated somewhere, someone must check them and make sure that the expiration date has not expired, otherwise the philanthropist will be criminally liable, and this is all additional work and additional payment to employees. In addition, the seller is obliged to pay tax on goods sold free of charge with the help of food sharing. But when disposing of goods, the company can receive a tax deduction in the amount of 20% of its value.

“Indeed, it is now more profitable for businesses to dispose of food than to donate it to charity,” Alieva-Khrustaleva confirms. — It's all about VAT. That is, a business, transferring food to food-sharing organizations for free, pays a tax of 10-20%, as in the sale. Of course, this is completely unprofitable: the disposal of products is two to three times cheaper.” According to the head of the Association of Retail Trade Companies (AKORT) Igor Karavaev, the organization has long been promoting the initiative at various levels to abolish VAT for goods with an expiring shelf life when donating them to charity.

Not so long ago, the theme of foodsharing also gained supporters in the legislative community. Thus, at the end of June, the LDPR faction submitted a bill amending the Tax Code to the State Duma for discussion. The amendments provide for the abolition of VAT on expired products and bottled water if they are sold free of charge. Children's and diet food, as well as alcohol, are excluded from the list of foodsharing products. Deputy Minister of Industry and Trade Viktor Yevtukhov said that the ministry supported the initiative.

“Exemption from VAT on expired goods donated to charity will give a new impetus to the development of food sharing in Russia, help save tens of thousands of tons of quality food from disposal,” representatives of the Magnit retail chain are sure. ANO Foodsharing says that not only Magnit is ready to develop foodsharing under more favorable external conditions. “At the end of 2022, we conducted a survey of leading retail chains in Russia. Its results showed that almost all retailers from the top 10 are considering the introduction of foodsharing while removing a number of barriers, including tax ones,” commented a representative of the organization.

The food-sharing potential is huge, emphasizes Anna Aliyeva-Khrustaleva. “According to our calculations, if tax barriers are removed, then about 1.2 million tons of products could be redistributed. Such a volume will provide food for absolutely all Russians who find themselves in a difficult life situation. Now, thanks to food sharing, only a few thousand tons of food per year are redistributed. Thus, the Rus Food Bank distributes about 10 thousand tons per year, while, according to the RAEC, the fund accounts for 90% of the total food sharing in the country,” she notes.

A huge number of people need food assistance - and these are not only those officially 20 million people below the poverty line, but also those who are not officially considered as such, but at the same time they barely make ends meet, Aliyeva-Khrustaleva continues. “Food is one of the main expenses for families in a crisis, and thanks to food sharing, they can use the saved money for other needs. Thus, food sharing in general raises the standard of living and gives people a chance to get out of the vicious circle of extreme poverty, ”she is sure.

Foodsharing participants and interested organizations note that in addition to the need to pay VAT, there are other problems. The press service of the X5 Group (the company has been developing foodsharing since 2021) lists warehouse logistics, as well as building the infrastructure for generating lists of those in need and transferring products, among such problems. However, all these problems will be solved in the working order, and foodsharing will become widespread if the main stumbling block — tax restrictions — is eliminated. “We believe that food sharing is an initiative that works well through the development of horizontal connections and the formation of local communities. It is important that the project is carried out locally. Now food rescue services are mainly concentrated in large cities, so we are making efforts to launch foodsharing in the regions,” says a representative of ANO Foodsharing.