A new bill mandating stricter state standards (GOSTs) for food production in Russia is causing concern among manufacturers due to potential price increases, especially for essential goods. While the legislation aims to improve product quality, industry experts predict a significant financial burden on producers.
Food producers are apprehensive about the new regulations. Currently under consideration in the State Duma, the bill would require all food manufacturers to adhere to GOSTs. Industry associations have voiced strong opposition, warning of product shortages and increased costs. They claim that many products currently available will no longer meet the stricter standards, and the remaining goods will become more expensive.
Experts, however, suggest the benefits outweigh the drawbacks. While acknowledging an initial price surge, marketer Alexander Azar believes the new standards will ultimately improve product quality and consumer trust. He compares the situation to the “Honest Sign” initiative, which improved product quality by combating the sale of expired goods.
The owner of a feed production company, Anton Polilov, sees the merit in GOST compliance, even though it’s not mandatory for his agricultural products. He views it as a marketing advantage, allowing customers to choose products that meet the standards. However, he acknowledges the initial market disruption and the potential for increased costs for some manufacturers.
The price increase will be most noticeable in certain sectors. According to branding specialist Nikita Sennikov, milk and dairy products are expected to see the largest increase (10-15%), especially complex products like yogurts and cottage cheeses. Semi-finished meat products could rise by 8-12%, while bread and bakery products may increase by 5-10%. Baby food is also projected to increase by 10-15%.
The price hike is attributed to additional burdens on manufacturers. These burdens include recipe processing, laboratory research, packaging changes, and document re-registration. Sennikov notes that small and medium-sized businesses will be particularly affected due to a lack of reserves for rapid adaptation.
Some products may disappear from store shelves altogether. Dairy farmers predict that up to 10% of brands, especially those produced by small enterprises, could exit the market. Products with milk fat substitutes may be removed if they don’t meet the new requirements.
To mitigate potential negative consequences, experts emphasize the need for a transition period and government support for businesses. Without such measures, even improved quality standards could create problems for the entire food sector. While large players can redistribute resources and the market will eventually adapt, price increases and reduced product diversity are expected during the initial implementation phase.