Market analysis | IDM
9 2017 | international-dairy.com · 23
Russia – because it is cheaper, compared to the products made in accordance
to the "classical" receipts, so more people can afford it. At
the same time, it would be wrong to think that Russia’s dairy industry
completely shifts to the "dangerous" palm oil," Belov said.
"We believe that some basic milk products should not contain palm oil
in any form. These are cottage cheese, milk, sour cream, cheese. These
product names should be protected, and there should not be any exotic
plant component included" Dmitry Yanin, chairman of the International
Confederation of Societies Consumers, argued. "In other words, if
a product contains palm oil, producers should not be allowed to name it
‘sour cream’, ‘cheese’, but chose some other name instead."
Russia’s Agricultural Ministry suggested to amend the legislation introducing
stricter liability and in particular bigger fines for manufacturers
for replacing milk fat and not providing proper declaration. The ministry
also targets to make labels more transparent to consumers, but it is not
known yet, when those changes should see the light.
Organic products which are not
truly organic
As opposition to the dairy surrogates in the market several Russian producers
started manufacturing so-called eco-products, which is believed
to be organic. In most cases, manufacturers put an eco-label on the
package, also assuring customers their products don’t contain any antibiotics,
GMOs and milk substitutes. But the trick is that in Russia there are
no official organic standards yet and anybody can use eco-labels.
"A customer basically does not see the difference between organic,
ecological or product from the peasant farm. As far as the situation
is not regulated by legislation at the moment, any product can be described
as eco, organic and so on. Currently, there is no relevant law. It
was submitted for consideration last autumn and was sent for revision
to the Ministry of Agriculture, and I think by the end of the year the law
eventually should be adopted," Sergei Korshunov, head of the Russia’s
Union of Organic Agriculture (RUOA), said.
According to the All-Russian scientific research institute for agricultural
economy, at the moment only 0.2% of the Russian agricultural
land passed organic certifications. In the meantime, the share of dairy
products in the country’s market labeled as organic reaches 4-8%, according
to various estimations, whilst in fact at least every third dairy
producer uses some eco-friendly rhetoric to assure customers that his
product is healthier than that of competitos.
Still, official RUOA estimations show that at the moment the average
consumer in the country spends only EUR 0.8 per annum on
organic food products and in most cases these are imported products,
compare to EUR 10 on average in the world and EUR 110 in
United States. The heads of organization harbor some hopes that the
new law will bring some order into the market and will establish some
framework for the development of an organic market in Russia, including
dairy products. RUOA believes that in future one in ten dairy
producers in the country will be actually engaged in manufacturing
of organic products.
European products with Russian taste
Since 2015 the so-called niche of European dairy products, in the first
place European cheese, has been booming in Russia. Russia’s cheese
plants started producing Camembert, Mozzarella, Brie and everything
else, except Parmesan. However, coming from Europe, Russia’s tourists
are still allowed to carry up to 5 kg of cheese with them, tax-free.
"In general, Russian-made ‘Euopean’ cheese is not so bad, and in
some particular cases it is even good, but almost every time it has almost
noting to do with the original taste of European cheese," Mikhail
Dementiev, spokesperson of the Russia’s Union of Consumer Right
Protection said.
"It is a pity indeed that no legislation in this area has been introduced
in Russia, prohibiting the use of names of some dairy products, when
manufacture is not adhering to some basic receipt. There are several
producers whose cheese taste like rubber, or like plasticine, but definitely
not like the cheese under the same name that is imported and these
manufacturers cast a shadow on the entire niche," he added.
Ilya Izmailov, chief technologist from the small cheese factory Ingala in
Tymen Oblast, complained that in Russia it is hard to produce premium
dairy products and cheese of popular sorts, because of the shortage or
better say almost complete absence of quality raw milk. The same problem
in the past has been pointed out by Valio, as the company spent
nearly three years to negotiate with potential suppliers in St. Petersburg
region and eventually authorized only two farms that were delivering raw
milk with the proper quality.
Mika Koskinen, general director for Russia and CIS in Valio, also stated
that the price for milk in Russia despite the quality is one of the highest
in the world reaching almost EUR 1 per liter, he told the local Russian
media in June 2017.
And after all, it would be wrong to think that all particular segments at
the new Russian market exist separately, as there were precedents when
cheese of Russia-origin under some popular European brands has been
found not containing any milk fat at all, only the named substitutes.
It is quite possible that someday or another such product will carry the
organic label as well.
As there is a lack of legal standards, consumers cannot be sure
about the nature of products labelled as being "organic"
Most of Russia’s trade organisations think that basic milk products
incl. cheese should not contain palm oil in any form