The Business Council of the Eurasian Economic Union opposed the labeling of dairy products

The request is set out in a letter from the Business Council (available to “Interfax”) addressed to the Chairman of the EEC Board, Mikhail Myasnikovich.

The Council notes that producers and processors of dairy products of the EEU Member States (the Belarusian Agro-industrial Union, the Dairy Union of Kazakhstan, the National Union of milk producers of Russia (Soyuzmoloko) and producers of milk and dairy products of Kyrgyzstan) are concerned about the labeling initiative and consider this measure inappropriate. This is confirmed by their numerous appeals to the EEC, governments, as well as national unions of entrepreneurs of the EEU Member States.

"First of all, this concern is explained by the fact that dairy products are perishable and are not counterfeit. To ensure its safety and traceability, tools such as a veterinary certificate and electronic invoices are already being used, the letter says. "Taking into account the fact that dairy products are socially important goods in high demand, in the current crisis, it is unacceptable to increase prices for this category of goods associated with the cost of labeling".

According to Soyuzmoloko calculations given in the document, the introduction of mandatory labeling of dairy products will require a one-time capital expenditure of Russian dairy producers in the amount of at least 26 billion rubles, and annual operating expenses will amount to about 35 billion rubles. According to preliminary calculations of the Dairy Union of Kazakhstan, the annual cost of introducing labeling of dairy products in the country (including the cost of labeling codes and equipment) will amount to about 4.3 billion tenge (at the cost of a labeling code of 3 tenge). According to preliminary estimates, the estimated cost of technical re-equipment of production lines of Belarusian milk processing enterprises for applying labeling codes will amount to 41.4 million Belarusian rubles. In addition, the annual cost of purchasing and applying labeling codes will range from 63 million to 102.4 million Belarusian rubles. According to Belarusian business estimates, the increase in prices for dairy products due to the introduction of its labeling will be up to 9%.

The letter reminds that in February 2018, an agreement was signed on the labeling of goods by means of identification in the EEU, which entered into force on March 29, 2019. When it was adopted, the Member States of the EEU proceeded from the principle of expediency and respect for the balance of interests of the state and business. It was assumed that the introduction of labeling would apply primarily to expensive, most often involved in illegal trade goods.

The agreement allows members of the EEU to unilaterally introduce labeling of individual goods on their territory, regardless of the assessments and positions of other EEU Member States. "The current practice of making such decisions in the EEU shows that other EEU Member States are forced to introduce similar labeling on their territories to avoid failures in mutual trade with the initiator country and protect their market from unlabeled products. At the same time, when making decisions by the countries of the Union and the Eurasian Economic Commission, a proper analysis and assessment of the economic feasibility and necessity of introducing labeling for a particular product is not carried out", the letter says.

The Business Council also requests the EEC, with the participation of the business community of the EEU countries, to review approaches to the introduction of labeling by individual EEU Member States, taking into account the principle of equal benefits for all countries. In particular, it is proposed to exclude from the agreement on the labeling of goods by means of identification in the EEU rules on the possibility of unilateral introduction of labeling by individual countries and to give the Commission the authority to analyze and evaluate the impact of labeling of individual goods in mutual trade within the EEU.

As reported, the experiment on labeling of dairy products, which began in the Russian Federation on July 15, 2019, will continue until December 31, 2020. The deadline for introducing mandatory labeling of dairy products is January 20, 2021. The individual categories of dairy products covered by this decision will be determined based on the results of an evaluation of the results of the experiment.

Currently, an experiment on labeling packaged drinking water, including mineral water is also underway.

The operator of the labeling system is CATD - a joint venture of USM by Alisher Usmanov (USM Technologies, 50%), the Group of companies Rostech (concern “Automatika”, 25%) and “Elvis-Plus group” by Alexander Galitsky (25%).

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