Russia launches pilot project on beer labelling

Bonn – The Ministry of Industry and Trade plans to launch a pilot project for the digital labelling of beer and beer-based mixed drinks in spring 2021.

By Edda Wolf | Bonn

Project group in formation
To eliminate counterfeit and illegal goods from the market
Breweries reject labelling

Industry Minister Denis Manturov intends to extend the project of compulsory labelling and traceability of goods by introducing compulsory labelling of alcoholic beverages. This was stated by Denis Manturov during a meeting of President Vladimir Putin with members of the Government on 9 September 2020.

At the beginning of 2020, the Ministry of Industry and Trade prepared a draft resolution that provides for a pilot project on labelling alcoholic beverages using radio frequency identification (RFID) tags. The pilot project is expected to start in spring 2021 with the digital labelling of beer. If the trial is successful, the labelling will be extended to spirits.
Project group being set up

For the implementation of the pilot project, a working group will be set up under the leadership of the operator of the “Chestny Znak” system, CRPT. Project parameters, technical characteristics and timing will be discussed with representatives of the industry, regulatory authorities, retailers, the operator and other interested organisations. The aim is to test business processes and develop the optimal solutions for manufacturers and other participants in the distribution chain.

In order to join the working group and participate in the pilot project, a letter of agreement on official company letterhead, indicating the person responsible for the labelling and his contact details, must be sent to the Head of the Beer and Beer Drinks Product Group Nikolay Gladkov.
Counterfeit and illegal goods to be eliminated from the market

“I think that the pilot project can be launched in spring, taking into account the time for preparation and the decision-making process”, said Minister Manturov. “We think it is important to start with labelling in the alcohol segment in order to protect consumers. This is important as this sector is particularly vulnerable to illegal goods and counterfeiting”.”

In 2019 Russia produced 7 billion litres of beer and 850 million litres of beer drinks. According to the Centre for Research on Federal and Regional Alcohol Markets (ZIFRRA), the Russian beer market in 2019 amounted to 650 billion roubles and the market for beer-based mixed drinks to about 75 billion roubles. The volume of the illegal beer market in Russia is between 5 and 12 percent, the Ministry estimates. As a result, the state budget loses 22 billion roubles of revenue annually. The labelling of beer will increase the profits of legal producers by 2.5 billion to 3 billion roubles.
Breweries reject labelling

The major breweries in Russia oppose the introduction of beer labelling. According to AB InBev Efes (Anheuser-Busch InBev), Baltika (Carlsberg Group) and Heineken, there is virtually no problem of counterfeiting on the beer market. They call the measure a new excise tax and refer to the existing EGAIS tax system, which allows beer drinks to be fully traced from the brewery to the shop. In addition, labelling would require investment in equipment and staff and a reduction in the speed of the bottling lines, which would increase production costs and the price on the shelf.

“The cost of installing labelling equipment on a production line is about $1 million and in a large plant there are at least ten such lines. Considering that the brewing business is low-margin, these are significant costs,” Oraz Durdyev, Director of Legal and Corporate Relations of AB InBev Efes, told “The introduction of labelling will inevitably lead to a price increase on the shelf and become the second excise tax for the industry,” Durdyev said.

Source: Germany Trade & Invest