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Consumer Goods to be costlier due Government’s Track-and-Trace System in Russia

For some of the products such as alcohol and pharmaceutical drugs, Russia’s digital track-and-trace system includes identification measures. The government is now planning to expand this system for almost all types of goods.

The Chestny ZNAK system which was launched in 2018, is designed for the verification of each transaction made by merchant by assigning a unique code to or IDs to physical goods. These codes or IDs can be anything like a QR code, an RFID tag or sometimes it can be both.  When a product is purchased, the code is scanned and the record of the transaction is made in the government database. Mislabeling of any product is considered to be a criminal offense and the owner can get punished for the same.

Russia is not alone to implement a system of this kind. But out of all the countries the Russian approach seems to be unique. The reason behind that would be the government eventually wanting to cover all products. It is claimed by the authorities that this might cause fight on the distribution of duplicate items.

It is definitely going to affect the businesses. Managing partner of one of the largest dairy producers in the Moscow region Uvarovsky Julia Osipova, writes that Russia’s dairy industry will have to pay around 20 billion rubles (USD 319.6 million) per year. Even the subsidies received from the states by the industry is much less than this amount.

Milk Company Soyuzmolok’s General Director, Artem Belov said that there is no illegal goods problem for the dairy market. He further added that if the dairy product does not contain the ingredients as mentioned on the label is the real problem.

The policy might result into the increase in the cost of basic products such as clothing and food as the business would be trying to cover their costs. But it is claimed by the Chestny ZNAK’s defenders that the customers will be benefited by the labeling system. In addition to the problems that comes with this system there are some benefits as well. The system gives government an access trace the products and thus the consumer’s activities are monitored making the market more transparent.