Expenses of milk processors in Bashkiria will grow due to labeling - Ministry of Agriculture

‘The approximate cost of labeling a specific unit of goods for such enterprises will be from 0.1 to 4 kopecks. For large and medium-sized manufacturers, when printing the labeling code in the printing house, investments will amount to about 100 thousand rubles. The cost in terms of labeling one unit of production is less than one kopeck (about 0.1 kopecks). If the company decides to equip the production line and apply the code directly in the production process, investments in terms of labeling one unit of production will amount to about 4 kopecks,’ reported in the Ministry of Agriculture of Bashkiria.

The cost of installing equipment on one production line will be from 2 to 5 million rubles, added in the Ministry. Taking into account the costs of labeling each unit of production, the amounts in this way can reach tens of millions rubles. For small industries, a set of equipment consisting of a thermal transfer label printer and a manual scanner will amount to 15-30 thousand rubles.

Companies and farmers in Bashkiria will be able to count on reimbursement of part of the expenses from the budget. As part of the Concept for Development of Food and Processing Industry in the Republic of Bashkortostan for 2021-2026, the government approved the procedure for granting subsidies to compensate for part of the costs of purchasing equipment. Funds can also be obtained for the purchase of equipment for labeling products. The amount of the subsidy will be up to 3 million rubles in each case.

The Federal Ministry of Agriculture is considering the possibility of providing state support in the form of preferential loans for purchase of labeling equipment.

Mandatory labeling of dairy products in Russia is being introduced by step since 2021. Since June 1, manufacturers are obliged to label ice cream and cheeses. Since September 1, labeling has become mandatory for products of all subgroups with an expiration date of more than 40 days, since December 1 - with an expiration date of less than 40 days. Since December 1, 2022, farms and agricultural cooperatives will be obliged to label their products.

As Executive Director of the National Union of Milk Producers Artem Belov told RBC Ufa, the introduction of mandatory labeling will inevitably lead to an increase in the price of products.

‘We are now in a transitional period when the system is being implemented. In principle, it is quite expensive. According to the most conservative estimates, the capex amount to about 12 billion rubles throughout the industry. The opex are also quite large, and the code itself costs about 60 kopecks including VAT. In total, according to our estimates, the cost of dairy products can grow by an average of 2.5-4%,’ Belov said.

At the same time, the expert stressed that milk belongs to socially important goods and the government has the right to regulate prices for these products.

According to the Ministry of Agriculture of the Republic of Bashkortostan, there are 80 dairy enterprises in Bashkiria, of which 15 are large, that is, with a processing volume of over 50 tons of milk per day.