Russia’s electronic beer labels go live in September 2022

Russia | The Ministry of Industry and Trade proposes to start compulsory labelling of beer and low-alcoholic drinks from 1 September 2022. It is assumed that from this date mandatory electronic labels will need to be put on kegs, and from 1 December on the other types of beer packaging. A trial is currently underway, which will end on 31 August. The move is to dry out counterfeit beer.

The proposed terms, revealed on 16 December, were criticised by the Association of Beer Producers (APP). It represents the three largest players on the Russian market – AB-InBev/Efes, Carlsberg Group (Baltika) and Heineken – which control a combined 70 percent beer market share. The designated deadlines are unrealistic and could lead to shortages, warned Vyacheslav Mamontov, executive director of the APP.

The association estimates the costs of the mandatory label, called Chestny Znak, at billions of rubles. “For a large brewery, the cost of introducing the labelling will be about 10 million rubles [USD 136,000] per one modern high-speed line, without the IT part. On a market scale, costs will be measured in billions of rubles,” the APP said.

Brewers’ fears unfounded, officials say

The Deputy Minister of Industry and Trade of the Russian Federation, Viktor Evtukhov, disagreed. He retorted that revenues in the beer industry are “very, very high”, and the costs are “not that big”.

The introduction of mandatory beer labelling will not lead to a shortage, predicts CRPT, the operator of Chestny Znak. The firm reported that its electronic track & trace labels have already been introduced in 14 commodity groups, including dairy and mineral water, with a volume of 12 percent of the country's non-resource GDP, and has not caused any disruptions. Nor did it lead to price increases.

Instead, CRPT pointed to a study by the Ministry of Finance, which argued that Chestny Znak will increase profits for bona fide brewers by RUB 2.5 billion to 3 billion (USD 40 million), will create up to 1700 jobs and increase the annual tax receipts by RUB 20 billion (USD 262 million) per year.

Who is to be believed?