Danone rejected the experiment on the labeling of dairy products
French group Danone, the largest milk processor in Russia, refused to participate in the pilot project on labeling of dairy products, which was agreed upon last year. CEO of the Russian office of Danone Charlie Cappetti told about this to RBC.
At St. Petersburg economic forum last year, Danone took the initiative to conduct a pilot project on labeling of dairy products. Then the company signed a cooperation agreement with the operator of the labeling system - the Center of advanced technologies development (CATD). The parties reported that as part of the pilot, Danone will test the labeling at several production sites to track the movement of products "from the factory to the counter".
During the pilot project, companies can prepare for the introduction of labeling in a comfortable mode, says Deputy Director of the CATD Revaz Yusupov. According to him, last year the CATD conducted technical studies with Danone and made recommendations on which way would be the best and least expensive to integrate labeling. According to him, "each company chooses independently how to prepare for the implementation of the requirements of the legislation".
At that time, labeling was of interest to manufacturers as an alternative to another control system. Dairy companies did not want the system "Mercury" developed by the Rosselkhoznadzor, which tracks the path of products "from the field to the counter" with the help of electronic veterinary certificates, to be extended to finished dairy products. Danone and PepsiCo warned that due to the need to issue veterinary certificates, the cost of dairy products could rise.
Danone wanted to participate in a pilot project on labeling to understand the costs of its introduction, explains Cappetti. But one of the conditions was the exclusion of finished dairy products from the list of products subject to electronic veterinary certification. The government first was cooperative to milk producers: in June 2018, the head of the Ministry of industry and trade Denis Manturov said that the finished dairy products will be removed from the action of "Mercury". But in February, the government decided not to make an exception for dairy products.
Since July 1, 2019, "Mercury" monitors the flow of raw milk to the plants of milk processors. And since November 1, 2019, the system will control the path of finished dairy products (milk and cream in consumer packaging, yogurt, kefir, cottage cheese and other finished dairy products) to the consumer.
But in parallel, the government has not abandoned the idea to introduce labeling for dairy products. On July 15, the industry launched an experiment on labeling, which will last until February 29, 2020.
At the same time, in September, before the completion of the experiment and its results, the State Commission for combating falsification approved the inclusion of dairy products in the list of labeled goods approved by the government. The order, according to which mandatory labeling of dairy products will begin on June 1, 2020, has already been prepared, said a source of RBC in September.
Danone supports the government's efforts to combat falsification, stresses Cappetti. But the discussion of the labeling system that could be implemented in addition to “Mercury” raises big concerns for the company: according to Cappetti, "it will be a double technological and financial burden that no business is able to bear".
This burden will be included in the price and in the end still fall on the shoulders of consumers, added Cappetti. Soyuzmoloko estimated that one-time costs of manufacturers for labeling can be about 25 billion rubles, and additional annual costs - another 20 billion rubles.
"If the government has decided to implement the system “Mercury”, we agree with it and implement it. But we believe that it would be wrong to load one category with two traceability systems", said the head of Danone in Russia.
In addition, the cost of the labeling service itself raises questions for the dairy industry. The barcode, which marks each unit of the released goods, costs 50 cents, points out Cappetti. The barcode for labeling fur coats and cigarettes costs the same, but the share of these costs in the cost of a package of milk and other dairy products that Russians buy every day will be higher, according to Danone.
"The elimination of illegal trafficking in the dairy market after the introduction of labeling should increase the profits of legal producers by 3% and reduce factory selling prices by 1.4%, thus the products for buyers should also fall in price", — objects Revaz Yusupov.
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