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Mandatory Labeling: Rising Prices, Gray Schemes or No Costs

Each brand applied to goods within the framework of a unified tracking system adds about 75 rubles to the retail price, some Moscow entrepreneurs believe. And they say that labeling can be ruinous for business. Other participants in the process believe that the costs will be minimal. Marking adds 75 rubles to the retail price of each item. This was stated by the chairman of the board of directors of the Leonardo hobby hypermarket chain Boris Katz at a meeting of the Ombudsman for Entrepreneurs Boris Titov with representatives of Moscow business on February 17, the press service of the Ombudsman reported.

We are talking about a unified system for marking and tracking goods, which should be fully operational in 2024. Two years ago, the labeling of tobacco, medicines, shoes, perfumes, photographic products, tires became mandatory. Last year, five groups of light industry products and dairy products were labeled. Experiments are underway to label dietary supplements, beer, and low-alcohol drinks.

For many retail entrepreneurs, labeling will become an unbearable burden, Katz estimates.

“We have calculated what, taking into account all organizational expenses, the cost of labeling a unit of goods is poured into when it moves along the chain – manufacturer-importer, federal wholesaler, regional wholesaler, retail. It turned out 75 rubles per unit, ”said Katz.

In his distribution network, 80% of the goods cost less than 150 rubles, Katz claims that the price increase will be at least one and a half times. “It will be much more expensive to send a child to school. Despite the fact that we can have counterfeit goods in only two or three articles per 10 thousand. Yes, the Monopoly game is sometimes faked. And it seems there are some fake electric scooters on the market. And that’s all,” says the entrepreneur.

The introduction of mandatory labeling in public catering from September 1, 2022 will lead to the fact that most participants in the restaurant business will become violators of the law, Sergey Mironov, founder of Meat & Fish restaurants, believes. According to him, chefs will still accept unlabeled products, as they are not responsible for this.

To avoid this, the institution will have to hire a storekeeper, pay him a good salary, and these are serious expenses. But the restaurant business can't afford the extra expense right now. And most likely, no one will hire any storekeepers. “As a result, 95% of restaurant market participants will become violators. The paradox is that restaurants will not be interested in buying goods “white”, in the current conditions this will impose even more serious risks on them,” Mironov said.

Automation experts disagree^^The ATOL company, which automates work processes for retail, disagreed with the calculations and conclusions of capital entrepreneurs. They believe that most of the "marking" processes will cost entrepreneurs nothing at all.

“It is not entirely clear how the impact of labeling on the cost of positions was calculated. Specifically for public catering, work in the labeling system in most cases implies integration into existing business processes with minimal effort and financial costs,” said Evgenia Myachkova, project manager of the Competence Center for Digital Economy and GR at ATOL.

According to her, in order to work in the labeling system, public catering enterprises will need to register for free, connect electronic document management (EDF) for free, and add only two procedures: acceptance and disposal of labeled goods.

“For example, if we are talking about milk for a coffee shop, then upon acceptance, you will need to accept a universal transfer document with labeled milk in the EDI, scan the DataMatrix codes from each milk package (recommended, but not necessary) and sign the incoming document using an electronic digital signature. The already existing EDS is suitable for this, which the business uses in any case to send reports to the Federal Tax Service, ”explained Myachkova.

She stressed that to scan goods, it is enough to purchase one hand-held scanner worth 3-4 thousand rubles. At the same time, you can refuse the scanner and legally issue the so-called trust acceptance (without checking the marking codes), but this carries certain risks in case of violations.

“Connecting an electronic document management system, as a rule, does not require either one-time or regular financial costs when working with incoming documents, but there are also paid options: the maximum tariff that I have met is 500 rubles a year,” says the representative of “ ATOL".She added that for medium and large catering, connecting to the labeling system will require more automation. “But, as a rule, such enterprises already use enough tools to implement new processes almost painlessly,” the specialist concluded.

1000 rubles is the limit

The Union of enterprises and masters of the industry of needlework and creativity "Creation" agrees with the arguments of the representative of "Leonardo" Boris Katz and restaurateur Sergei Mironov. They consider the introduction of marking now unacceptable and sent their objections to the Ministry of Industry and Trade (the text of the appeal is at).

Representatives of the industry believe that Russia has already created a fairly effective way to combat counterfeit products. This is a system of mandatory certification and declaration. And the expansion of the labeling system to toys entails the need to implement a huge IT system.

“The cost of the line for automatic stamping costs several million rubles. Each of the products that differ in size or type needs its own line. At the same time, additional costs arise for the installation, adjustment and maintenance of such a line, ”the letter to the Ministry of Industry and Trade says.

Entrepreneurs propose to establish a specific criterion: if the main product in a group of goods retails for less than 1,000 rubles, the labeling should not be introduced.

At a meeting with Titov, entrepreneurs acknowledged the success of the authorities in labeling certain goods: fur coats, fur products. But this success "cannot serve as a justification for the general labeling of everything and everyone."

Labeling in the fur trade is justified by the price-to-overhead ratio. But it is unjustified to introduce a tracking system for inexpensive everyday goods, representatives of the capital's business noted.

“Business says that labeling threatens with a significant increase in costs, labeling will create difficulties that will affect both large networks and medium-sized businesses,” explained Tatyana Mineeva, Commissioner for the Protection of Entrepreneurs' Rights in Moscow.

The Chamber of Commerce and Industry reported that they "share the concerns of colleagues from the Moscow business community" about the labeling. The CCI calls on the Ministry of Industry and Trade to minimize the financial burden, especially on small and medium-sized businesses. “At the same time, it is necessary to strengthen the work of law enforcement officers with the shadow sector of the economy, since digital marking controls only respectable business,” said Alexander Borisov, Chairman of the Council of the Chamber of Commerce and Industry for the Development of the Consumer Market.

What deputies and lawyers think^^^State Duma deputy, Doctor of Economics Nikolai Novichkov says that control over what appears on store shelves or on cafe tables is definitely needed.

“You just don’t have to do it clumsily, as we like. Mandatory labeling in the consumer segment in the form that is offered now is definitely a price increase and the transfer of business to “gray” schemes. Who needs it? State, consumer, society? There is no definite answer. And he should be,” says Novichkov.

According to him, the state actually left the economy 30 years ago. “What did it lead to? In addition to the fact that our consumer market has flooded is unknown. Throughout the 90s, we ate no one knows what, dressed no one knows what, used no one knows what in everyday life, ”the parliamentarian believes.

The MP proposes to introduce a moratorium on mandatory labeling, at least for the whole of 2022.

“And maybe for the whole of 2023, until the beginning of 2024, when a unified national labeling system should start working,” says Novichkov.

He proposes to justify the moratorium by the crisis that the country is experiencing due to the COVID-19 pandemic. “The entrepreneur needs to be helped now, and not driven into “gray” schemes. And during the period of the moratorium, it is necessary to try to develop an understandable, feasible and, most importantly, not too expensive control mechanism for the consumer. I am definitely for government oversight. And the Ministry of Industry and Trade is strategically on the right track here,” Novichkov concludes.

Andrei Krupsky, chairman of the Opora Rossii Litigation and Bankruptcy Committee, says the business community's concerns are understandable: labeling is associated with additional costs. Which ultimately will fall on the final consumers. “When many companies participate in the chain of movement of goods, each puts its costs for the labeling system into the cost. As a result, at the end of the chain, some categories of goods may double in price,” says Krupsky.

He also considers it debatable whether the consumer will ultimately benefit from such a fight against counterfeiting. “The problem of counterfeiting is relevant only for a number of categories of goods. There may be a situation where the consumer pays an additional indirect tax without receiving any significant benefits from the new system, ”concludes the lawyer.

Mandatory Labeling: Rising Prices, Gray Schemes or No Costs