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- They don't expect a miracle: The Ministry of Industry and Trade announced new return conditions for foreign brands
They don't expect a miracle: The Ministry of Industry and Trade announced new return conditions for foreign brands
Foreign companies will need a Russian partner to return to the Russian market. Also among the conditions are control by the authorities, the landing of technologies and, in the future, the localization of production on our territory. Anton Alikhanov, the head of the Ministry of Industry and Trade, announced this at the strategic session of the Russian Retail Week, which started on June 2 in Moscow. The business supported the official: foreign companies should at least localize their production in the country.
Conditions for the return of foreign business
The annual Russian Retail Week forum has started in the capital, where officials and businesses discussed the future fate of foreign companies that have left the Russian Federation. The conversation unfolded at the strategic session "The return of foreign brands to the Russian Federation: economic feasibility, conditions and consequences," where Anton Alikhanov, the head of the Ministry of Industry and Trade, was the first to express his opinion.
First of all, he noted that the country already has experience of foreign partners leaving the domestic market. This was the case in 2014, when Russia reacted to food sanctions against it. Then our food and processing industry coped with import substitution. Since then, the share of domestic products on store shelves has increased from just over 60% to 80%, "the skeptical attitude has changed to serious confidence: we can do even more," the minister noted.
He recalled that at that time, domestic manufacturers appealed to the authorities to keep the restrictions in force: their business in the country flourished in the absence of foreign competitors. A similar situation is happening on the market now: the Russian Federation has legalized parallel imports in order to provide consumers with all the necessary products, plus the domestic production of non-food products has been actively developing.
So far, Western brands have not sent official requests to the Ministry of Industry and Trade to return to the country, but the authorities are confident that "there should be no preferential and simple entry regime, taking into account the difference in macroeconomic conditions and the difference in credit conditions," Anton Alikhanov emphasized.
"It's reckless to say that let's just let everyone back into our retail: if someone wants to come back, it's only with Russian partners, only with Russian control, only with the landing of technology and only with the development of a full production cycle on our territory in an understandable perspective," the minister said. — We need to talk to retail differently, we saw how our partners took and left, leaving empty shelves behind them.
The head of the Ministry of Industry and Trade did not specify which specific partnerships were in question in this case. Izvestia sent a request to the agency.
Federal retail chains agree with him: foreign brands that are ready to return to sales in the domestic market should be ready to develop production in the country, said the chairman of the Presidium of the Association of Retail Companies (ACORT). Stanislav Bogdanov, speaking at the strategic session. First of all, this should concern those industries where our industry lags behind in terms of volume, quality and cost of production.
The position of the Ministry of Industry and Trade regarding the conditions for the return of foreign companies is quite justified: they grossly violated the rights of consumers, employees and counterparties when leaving, and many foreign concerns should not be considered reliable and conscientious partners, Oleg Pavlov, head of the Public Consumer Initiative, is convinced. This requires the introduction of additional regulation and control, he told Izvestia.
Production of goods within the country
Do not forget that foreign brands will bring high standards of product and work quality to the country, create competition, and force domestic manufacturers and retailers to reach up and grow, said Evgeny Movchan, CEO of Petrovich STD. Moreover, consumers have a choice, he added.
— But we must not forget about the departure of these brands: there were no economic prerequisites for this, it was the usual political pressure. Many companies seemed to instantly press the shutdown button on their computer and leave. But people bought Western products in the hope of service, and they were left with nothing. Of course, we should take into account that the model that we used to work on needs to be changed. First of all, to achieve maximum localization of production by foreign companies, especially for components that are critical for us," he told Izvestia.
Secondly, we must not forget about the impact of companies leaving the market on people, that is, on employees, he added. Many were left with nothing, so it would be right if foreign companies set up social insurance funds in the country that would protect people from such actions in the future. We need actions that will help show that Western companies are ready to become part of the country's economy and become socially responsible businesses, said Evgeny Movchan.
Tikhon Smykov, head of Inventive Retail Group, stressed that the issue should be put differently: on the eve of the potential return of foreign partners, the authorities should clear the market of counterfeit products.
— Tell me a foreign brand that has left the country and whose products cannot be bought in Russia today. We have absolutely everything, and often at the lowest price in the world. All foreign companies are happy, because they sell the same volumes in our country, while they do not incur any costs, do not provide any guaranteed service to the consumer, and do not invest in marketing and advertising," he said. — The authorities have loosened regulations themselves and introduced parallel imports in the country so that consumers have access to any foreign product.
But such an importation of products into the country has side effects, he stressed. For example, "a lot of counterfeit goods have appeared on the market, some of the goods are sold without a guarantee, they are of unknown origin, and many goods enter illegally." Together, this is not very good for a consumer who does not fully understand what he is buying. This is also bad for the state, which is short of taxes and fees. Therefore, the authorities have a lot of work ahead of them: to offset the negative effects of parallel imports, the expert is sure.
At the same time, for example, the food market did not feel any sales failure after the departure of foreigners, the consumer did not notice that something had disappeared from the shelves, said Ekaterina Lobacheva, head of X5 group. Before the departure of foreign partners, Russian products dominated the shelves, she added.
"If we compare 2019 with 2024, we won't see any big difference in the percentage of imported goods in food retail," she said.
According to Ekaterina Lobacheva, import has always solved and solves only a few problems: for example, it replaces what does not grow in our country due to climatic features, and provides a variety of products. Therefore, the return of foreign brands in products will not be immediately noticed by the buyer, she believes.
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