World meat industry news

The changing dynamics of the domestic Russian consumer market amidst Western exits is being underlined by Viktor Yevtukhov, the Russian Deputy Industry and Trade Minister. He has just tabled a proposal that will require Russian retailers to carry a certain share of Russian products in their stores.

Speaking at the X5 Group forum “Big Shelf for Small Business”, Yevtukhov said that “Our initiative is to introduce an obligation for Russian retailers to have a certain amount of domestic goods on shelves.”  X5 Retail is a unique concept formulated to bridge the gap between entrepreneurs, retailers, and startups and is being developed in other emerging markets.

The criteria for selection of such goods would include production in Russia and ownership of manufacturing facilities and trademarks by Russian citizens. “Such an approach will make it possible to avoid supporting pseudo-Russian goods, profits which go abroad, and add to the development of our competencies.” Yevtukhov said.

If passed, the bill will carry implications for foreign exporters wanting to sell to the Russian market. It could mean that in order to comply, foreign operators in Russia may have too:

• Form partnerships and / or Joint Ventures with local Russian companies;
• Register brand trademarks in Russia;
• Abide by stricter rules of origin regulations;

On the other hand, the bill could increase Russian entrepreneurial skills in terms of product development and manufacturing, investment into production capacity, while providing a boost to the domestic advertising and marketing industry.

This would be akin to various other national incentives such as Delhi’s ‘Make In India’ campaign and ‘Buy British’ statements in these respective countries. How the bill will deal with countries possessing trade agreements with Russia is uncertain, however it can be expected that exporters from these would likely be exempt.