Inconclusive embargo
Источник: The DairyNews
Three years after the introduction of Russia's retaliatory sanctions - food embargo, participants of the dairy market of the Russian Federation note that its effect is not exhausted, the investments have become more expensive, but continue to come into the industry, and one of the key challenges of the year for the sectoral managers is smuggling.
Despite the fact that three years have passed since the introduction of Russian food embargo, the interest for the sector is still unabated. However, the overall situation is characterized by several important features. First, it is the significant decline in solvency of the population and consumer demand. Second, industry participants note the increase in smuggling of products under the sanctions and, however, strengthening of the fight against them. Third, despite the growth dynamics of the domestic production of milk-consuming products, there is still a lack of raw materials for them.
"Restrictive policy of the US and the EU against Russia has spurred development, for example, of the enterprises of the Mari El Republic. "Sernurskiy cheese plant" continues not only to work, but also invests in the production of new products. I thinkour company in particular and industry in general, should expect further effect. Because, as we all know, sanctions are not going to be removed, but instead new restrictions are introduced," - says the Deputy General Director of JSC "Sernurskiy cheese plant" Taras Kozhanov.
Director of LLC "Darmilk" Anastasia Somtsova emphasizes that the effect of food embargo is not exhausted to this day. "Even after 3 years we do not have a sufficient amount of quality cheese," says the expert. – "As for ingredients for the dairy industry, there is an acute shortage and a number of problems. For example, we currently cannot work with some suppliers, with whom we worked earlier, because of the ban on the import of component parts for composite ingredients. But while they are not available in Russia or they are in the development stage, we have to select the necessary equivalent, and this means time, and the quality of the products manufactured by our enterprise", - said Ms. Somtsova, emphasizing that perhaps the embargo has already played an essential role, and it is possible to develop the import substitution for individual items without restrictions on imports.
Besides, at present, the import, if allowed, will not be competitive the entire domestic dairy products, experts say. With the exception of certain commodity positions. The price of raw milk in Russia is still higher than in Europe, however, the volatility of the national currency gives an advantage to producers of dairy products on the Russian market.
“The food embargo of course helped us. Unfortunately, there is smuggling, but it is expensive, and sometimes of untested quality, so of course we would like not to have it on the shelves in stores. Now in our country there are a lot of small dairies that produce delicious, high quality products, so for us it is very important to exclude the possibility of existence of sanction products next to our products. We do one big task: we develop a culture of cheesemaking in Russia, it was not there before the sanctions, and only a few were engaged in it, now this is a national trend to make high-quality cheese” - says Oleg Sirota, owner of the cheese factory “Russian Parmesan”.
The competition on the shelf has also increased, especially in the mass segment, where the main foreign competitor is of sufficient quality and inexpensive Belarusian dairy products.
According to Oleg Lakhov, a regional representative of the company LLC "Capital Prok" in the Central Chernozem region, on the shelves one can see a fair competition.
“It is difficult to enter a large trade network. But no one says that now we have empty shelves. No, on the contrary. There is a choice" - emphasizes Oleg Lakhov.
There is enough space in the domestic market has, says General Director of OOO "The Cheburashkins Brothers" Vladislav Cheburashkin. "I believe that local producers should get significant support, in order to develop their business," he notes.
In the stores of major retail chains the share of dairy products of domestic production at present is officially from 80 to 99%. In the network "Auchan", for example, the share of dairy products manufactured in Russia is 97%, the share of cheese of Russian production is 81%.
"The company AUCHAN has done everything possible not to reduce the range of cheese when the embargo was introduced. It opened a lot of new suppliers. Now cheeses of the Russian and Belarusian production are present on the shelves of AUCHAN stores, cheese from Switzerland, Serbia, Argentina and Tunisia is also imported," - said in comments to The DairyNews Maria Kurnosova, Director of communications and CSR of AUCHAN Russia.
One of the leaders of the dairy enterprise notes that the food embargo stimulates domestic production, and the effect of these measures in the industry is noticeable. "As for our company, we didn’t fully feel the positive effects of sanctions, as we produce milk, ice cream, condensed milk. In this niche there are not many competitors. The food embargodid not provide any additional opportunities for us," - says the market participant.
Director of LLC "Neva cheeses" Igor Lavrenov notes several problems in the domestic dairy import substitution. "The purchasing power of the Russians has declined, also due to the jump in the exchange rate. The consumer cannot always afford to buy high-quality expensive product, and the manufacturer, trying to sell the product at a more attractive price does a number of manipulations, thereby reducing its quality. Manufacturers are also afraid to invest now because they don't know what will happen after 2018. Moreover, these investments became very expensive. Russia produces uncompetitive equipment if we compare it with foreign companies," - says Igor Lavrenov.
It has to be noted that according to IFCN, the consumption of milk by the Russians in 2015 amounted to 229 kg per person; in 2016 this figure reduced by 2-3%. In the opinion of the experts and participants of the market, and the decrease in consumption and not the implementation of the policy of import substitution led to the growth of self-sufficiency in milk and dairy products. Thus the figures of the official statistics have improved without solving of systemic problems. Despite this, in the regions, a lot of industry participants note the growing of the support from the regional authorities, which leads to the arrival of the investors, capable to develop the necessary resource base and to the development of existing enterprises and formation of segment of small manufacturers that produce unique products.
Read full article in Russian on DairyNews.ru
"Restrictive policy of the US and the EU against Russia has spurred development, for example, of the enterprises of the Mari El Republic. "Sernurskiy cheese plant" continues not only to work, but also invests in the production of new products. I thinkour company in particular and industry in general, should expect further effect. Because, as we all know, sanctions are not going to be removed, but instead new restrictions are introduced," - says the Deputy General Director of JSC "Sernurskiy cheese plant" Taras Kozhanov.
Director of LLC "Darmilk" Anastasia Somtsova emphasizes that the effect of food embargo is not exhausted to this day. "Even after 3 years we do not have a sufficient amount of quality cheese," says the expert. – "As for ingredients for the dairy industry, there is an acute shortage and a number of problems. For example, we currently cannot work with some suppliers, with whom we worked earlier, because of the ban on the import of component parts for composite ingredients. But while they are not available in Russia or they are in the development stage, we have to select the necessary equivalent, and this means time, and the quality of the products manufactured by our enterprise", - said Ms. Somtsova, emphasizing that perhaps the embargo has already played an essential role, and it is possible to develop the import substitution for individual items without restrictions on imports.
Besides, at present, the import, if allowed, will not be competitive the entire domestic dairy products, experts say. With the exception of certain commodity positions. The price of raw milk in Russia is still higher than in Europe, however, the volatility of the national currency gives an advantage to producers of dairy products on the Russian market.
“The food embargo of course helped us. Unfortunately, there is smuggling, but it is expensive, and sometimes of untested quality, so of course we would like not to have it on the shelves in stores. Now in our country there are a lot of small dairies that produce delicious, high quality products, so for us it is very important to exclude the possibility of existence of sanction products next to our products. We do one big task: we develop a culture of cheesemaking in Russia, it was not there before the sanctions, and only a few were engaged in it, now this is a national trend to make high-quality cheese” - says Oleg Sirota, owner of the cheese factory “Russian Parmesan”.
The competition on the shelf has also increased, especially in the mass segment, where the main foreign competitor is of sufficient quality and inexpensive Belarusian dairy products.
According to Oleg Lakhov, a regional representative of the company LLC "Capital Prok" in the Central Chernozem region, on the shelves one can see a fair competition.
“It is difficult to enter a large trade network. But no one says that now we have empty shelves. No, on the contrary. There is a choice" - emphasizes Oleg Lakhov.
There is enough space in the domestic market has, says General Director of OOO "The Cheburashkins Brothers" Vladislav Cheburashkin. "I believe that local producers should get significant support, in order to develop their business," he notes.
In the stores of major retail chains the share of dairy products of domestic production at present is officially from 80 to 99%. In the network "Auchan", for example, the share of dairy products manufactured in Russia is 97%, the share of cheese of Russian production is 81%.
"The company AUCHAN has done everything possible not to reduce the range of cheese when the embargo was introduced. It opened a lot of new suppliers. Now cheeses of the Russian and Belarusian production are present on the shelves of AUCHAN stores, cheese from Switzerland, Serbia, Argentina and Tunisia is also imported," - said in comments to The DairyNews Maria Kurnosova, Director of communications and CSR of AUCHAN Russia.
One of the leaders of the dairy enterprise notes that the food embargo stimulates domestic production, and the effect of these measures in the industry is noticeable. "As for our company, we didn’t fully feel the positive effects of sanctions, as we produce milk, ice cream, condensed milk. In this niche there are not many competitors. The food embargodid not provide any additional opportunities for us," - says the market participant.
Director of LLC "Neva cheeses" Igor Lavrenov notes several problems in the domestic dairy import substitution. "The purchasing power of the Russians has declined, also due to the jump in the exchange rate. The consumer cannot always afford to buy high-quality expensive product, and the manufacturer, trying to sell the product at a more attractive price does a number of manipulations, thereby reducing its quality. Manufacturers are also afraid to invest now because they don't know what will happen after 2018. Moreover, these investments became very expensive. Russia produces uncompetitive equipment if we compare it with foreign companies," - says Igor Lavrenov.
It has to be noted that according to IFCN, the consumption of milk by the Russians in 2015 amounted to 229 kg per person; in 2016 this figure reduced by 2-3%. In the opinion of the experts and participants of the market, and the decrease in consumption and not the implementation of the policy of import substitution led to the growth of self-sufficiency in milk and dairy products. Thus the figures of the official statistics have improved without solving of systemic problems. Despite this, in the regions, a lot of industry participants note the growing of the support from the regional authorities, which leads to the arrival of the investors, capable to develop the necessary resource base and to the development of existing enterprises and formation of segment of small manufacturers that produce unique products.
Read full article in Russian on DairyNews.ru
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