Occupy instead: the Ministry of Energy criticized the bill on the "Russian regiment"
The Ministry of Economic Development criticized the latest version of the draft law on the "Russian shelf", namely the formulation of the basic concept of which products can be classified as domestic. The authors of the document are confident that this category should include goods that are manufactured in the country, and by domestic shareholders who are not controlled by foreigners. However, the Ministry of Energy noted that this approach contradicts current laws. The authorities have been unable to come to a consensus on this issue for two years. Whether this project has a chance of being accepted is in the Izvestia article.
What is a "Russian regiment"?
Almost two years have passed since the ministries refused to support deputy Tatiana Butskaya's bill on the "Russian regiment." He suggests that retail chains should allocate a fixed place on the shelves for domestic non—food products, and marketplaces should ensure the priority issuance of the first 50 cards of such products. The Ministry of Industry and Trade, which is involved in the creation of the document, strives to support our brands against the background of the sharp departure of foreign brands in 2022-2023. The document is constantly being changed, but this does not help in the approval process, Izvestia learned.
The Ministry of Economic Development criticized the key concept of the latest version of the bill — "goods of Russian origin." This follows from the ministry's papers, which were sent to the government and the Ministry of Industry and Trade in mid-February.
The authors of the bill are confident that only those products that were produced in the Russian Federation should fall under this definition. Moreover, its manufacturers cannot be under the control of foreign persons, with the exception of Belarus. Moreover, products cannot be considered Russian if they bear a trademark owned by foreign entities.
The Ministry of Economic Development clarified in its review: firstly, the proposed norms conflict with existing regulations. For example, in Russia and in the EAEU as a whole, declarations or certificates of origin are already used. They record the place of its production. Such documents are needed in order to reduce or reset import duties for companies if there are preferential regimes between the supplier countries.
Secondly, the MAYOR stressed, the bill risks restricting the rights of foreign trademark holders who have launched full-cycle production in the Russian Federation. Not to mention that companies are not required to register trademarks. This is the manufacturer's right, not his duty, the agency added. Therefore, if the project "on the Russian shelf" is adopted, domestic manufacturers will have to spend their efforts and finances on registering their brands with Rospatent.
The project has already been opposed by the Federal Antimonopoly Service and large-scale trade, which pointed out that such an approach could provoke price increases and end with empty counters in remote regions. It is the confrontation between ministries and businesses that still prevents the document from passing all the necessary approvals and getting to the State Duma. It seems that the document is bogged down in criticism and will not be supported soon, if it comes to that at all, a source in the cabinet noted.
The authorities should support domestic producers, give them preferences on the shelf and thereby stimulate their development and scaling, deputy Tatyana Butskaya told Izvestia. That is why it is so important to define them, as well as explain what "goods of Russian origin" are, and separate them from the mass of others.
Now you can find enterprises on the market that mimic Russian ones, but in practice they bring products from abroad to Russia, re-label them in the country and are considered ours — they should not be given preferences and shelf space, she is sure. The parliamentarian confirmed that work on the draft law is continuing: meetings are still taking place, where experts are clarifying the wording and norms of the document.
Izvestia sent a request to the Ministry of Economic Development.
How to support a domestic manufacturer
The Ministry of Industry and Trade told Izvestia that the bill proposes regulation that has not been applied in Russia before, so discussing its provisions is a normal workflow. Moreover, the agency has already prepared an updated version of the bill and invited its colleagues to consider it.
— The main thing for the Ministry of Industry and Trade is to stimulate the development of the Russian consumer sector industry. In fact, this project helps to level up the marketing capabilities of domestic and multinational manufacturers and their brands. And consumers will receive a wider range of domestic goods. At the same time, the bill does not propose norms that restrict the sale of goods manufactured abroad," the press service of the department said.
On March 6, the Ministry of Industry and Trade also announced that the bill would be finalized and considered in the State Duma in the fall.
Russian manufacturers are already developing quite successfully and presenting their brands that are popular with consumers, and some companies have done this without any government support, Alexey Popovichev, executive director of the Rusbrand association, told Izvestia. Moreover, domestic enterprises have invested significant amounts in the development of their brands, but now they are being offered to stand on the shelf and compete with those who did not invest in marketing, he noted.
— There is also a question about what to do with foreign companies that have sold their businesses to Russians, but the trademarks on their products still belong to foreigners. For example, this is the situation with Henkel, which has separated from its company in the Russian Federation. Will such a business be considered Russian? After all, domestic staff work on it, enterprises also pay taxes in the Russian Federation and much more, why these facts are not taken into account is still unclear," the expert added.
The bill also embarrassed other domestic manufacturers from the Association of Manufacturers of Perfumes, Cosmetics, Household Chemicals and Hygiene Products. Its executive director, Peter Bobrovsky, has repeatedly said that some of the requirements of the new project may not be feasible: for example, the manufacturer's ownership structure is changing, but this is not always reflected in the Unified State Register of Legal Entities and other open sources, which means that the retail chain simply does not know about it.
The support of truly domestic producers fully corresponds to the interests of the state: This allows us to create new jobs, develop import substitution, increase budget revenues and provide consumers with high-quality and safe products, Oleg Pavlov, head of the Public Consumer Initiative, told Izvestia.
— Therefore, various mechanisms to stimulate demand and promote our products deserve encouragement and support. At the same time, it is quite logical that only those companies whose profits remain in the country and are invested in the development of production should count on such measures, the expert is sure.
The domestic manufacturer really needs to be supported — to create preferences over foreign competitors, Alexey Koitov, co-chairman of the Consumer Union of the Russian Federation, told Izvestia. But this should not go against the interests of consumers, he is sure.
— If we determine the quota for Russian goods on the shelf, then many questions will arise, for example, what to do if our products are out of stock, but a new batch has not yet arrived, should we remove foreign analogues from sale? Plus, our manufacturer cannot always compete in price with foreign products, does this mean that domestic products will occupy the shelf and become stale? — the expert was surprised.
Foreign counterparts of large multinational manufacturers often outperform ours in terms of prices, since the former can reduce costs due to the volume and cheap labor in the countries of production, he added. In this case, only increased import duties can effectively balance competition, the expert concluded.
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