What is the meaning of the law on the “Russian regiment”
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The authorities returned to discussing the law on the “Russian regiment”. It involves priority placement for buyers of domestic goods both in retail and online. According to Deputy Head of the Ministry of Industry and Trade Viktor Evtukhov, the department will prepare a corresponding document and submit it to the State Duma. The parameters of the new regulation are still unknown.
The measure will help shift users’ attention to domestic products, believes Andrey Karpov, Chairman of the Board of the Association of Retail Market Experts: “This is a definite signal for investors. First of all, we are talking about the non-food segment and categories of domestic products that are unknown to the consumer. And for investors to go in this direction, they will be guaranteed sales and getting on the shelves of trade organizations. Again, not for everyone, this is a competitive situation in any case, it’s just that up to 50% of the assortment on the shelf will be represented by domestic products.
How will this affect Russian consumers? The situation is definitely not changing for the worse; there is no question of anyone needing to be removed from the shelf. Consumers receive an expanded product offering and, accordingly, more choice. This should probably lead to lower prices in the future.
If we just look at it by analogy, in 2014, when special economic measures were introduced for the supply of goods from Europe, in particular meat, dairy products, vegetables, fruits and fish, suppliers encountered certain problems. A lot has changed over 10 years; the production of domestic products in the food segment has increased significantly. There are also a number of regions that were targeted at supplying products, including from other countries, for example, Kaliningrad, the Far East, and now they have more of their own goods.”
The possibility of introducing the so-called Russian shelf in retail has been discussed since the spring of 2023. Initially, this only applied to offline trading. In the fall, parliamentarians proposed extending the measure to marketplaces. Online platforms were supposed to offer only Russian goods in the first 50 lines in search results. However, the Ministry of Economic Development criticized the idea, calling it unrealizable, including for technical reasons. However, online platforms have ways to circumvent the new rules, says marketplace expert Artem Bobtsov:
“The authorities, promoting this idea, say that Russian goods are not visible enough both offline and online, the buyer is not used to them, and, accordingly, we need to help pay attention to them. This goes against basic understanding of how the market works. The buyer is always much smarter than any algorithms and chooses the product of the highest quality, but at the same time the cheapest – price-quality ratio. If we talk about the behavioral model of, for example, a retail network or marketplace, then those products that people buy more often and that have the most competitive price are always put forward.
Until now, we continue to depend quite heavily on imported goods in many categories. I think the law will be adopted; it fits into the mainstream of import substitution and the trend of focusing on everything Russian. But the same marketplaces have a million options for circumventing the new law. They can rank this product differently, not list it in recommendation algorithms, or use a filter mechanism that many clients already use. After all, all marketplaces are designed primarily to sell goods to the maximum.”
In 2023, Deputy Head of the Ministry of Industry and Trade Viktor Evtukhov proposed introducing obligations for retailers, who must ensure the presence of a certain share of Russian products on the shelves. Among the selection criteria, he listed production in the country, as well as the ownership of facilities and brands by Russians. However, most goods are of domestic origin. For example, X5 Group notes that 92% of their product range is Russian products.
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