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Can Russia Attract New Market Suppliers? 3 Ways To Reach Russian Market Featured

24 February 2016

Deputy Director of Russia’s Veterinary and Phytosanitary Surveillance Service (Rosselkhoznadzor) Nikolai Vlasov, in his report, which was presented at the “Practical Recommendations of Rosselkhoznadzor and Retail Network for First-Time Supplier Countries” roundtable on February 8 at the ProdExpo, discussed several ways that new supplier countries can reap the fruits of the Russian market.

Russia is not a closed country,” Vlasov said during his speech. “And we know full well that some products are not produced and never will be produced in Russia. […] It is clear that Russia was and will be involved in international trade, but it should keep in mind that, as experience has shown, on the international level everything happens in a vacuum, not in space, but in an environment of mutual relations between two countries.”

While the sanctions spoiled the economic environment, it also opened up new opportunities for domestic produce manufacturers as well as alternative foreign suppliers including new connections with country suppliers of Latin America.

Not to boast, but I am able to say that in order to get to the Russian market, Russia offers foreign manufacturers three possibilities, instead of one, as is the situation of the EU and the US," he said. "We have a very comfortable situation with incoming (suppliers) to the domestic market."

The choice of one path over another, according to the deputy director, depends on the strategy the country plans to implement in Russia.

The number of states planning to establish a long-term partnership and deliver their products to the Russian market is represented by a several thousand companies. Russia is offering these companies a world-renowned auditing system or checks by Rosselkhoznadzor, to evaluate the safety of food production safety in a particular country.

Vlasov characterized this procedure as a “long” and “complicated” 2-3 year procedure. But after it is done, the country and its enterprises and or exporters will be inspected by Rosselkhoznadzor for compatibility with the requirements of this country. If the country is able to pass this audit, then it signifies that the prospective country's food security system is analogous or comparable to Russian standards.

The second possibility pertains to firms – several hundred of them – of a similar geographical location and origin. In this situation, Rosselkhoznadzor inspectors will verify specific foreign enterprises. As a result of these inspections, suppliers will be included in a register for third-country suppliers, having access to the markets of the member countries of the Eurasian Economic Community, which not only would include Russia but also the Eurasian Economic Union's other four member states: Armenia, BelarusKazakhstan and Kyrgyzstan.

This route can be applied to individual, low-risk companies that have previously passed thermal sterilization or other treatments and for those countries that have a long experience of working with Russia. Such companies can obtain the right to provide an assurance of compliance with the system to ensure quality to the Russian legislation. The list of such companies, audited by the appropriate agency of their own country, would then be sent to Rosselkhoznadzor, which includes them into the register. From then on, there are regular inspections. Vlasov called this variant the middle ground between the first and second routes. The second and third routes verify the compliance of enterprises with the Russian food security system. During the course of establishing a joint cooperation, approved companies can be added to the list.

These three routes can be used for a variety of production industries, in combination or separately,” the deputy head of Rosselkhoznadzor said.

Vlasov commented on the openness of Rosselkhoznadzor toward establishing new contacts as supplier countries as well as warning its foreign colleagues against secrecy and deception. Ahead of Russia’s move to issue counter sanctions, certified by Rosselkhoznadzor, the number of foreign enterprises was constantly growing, but the quantitative volume of shipments to the Russian market did not grow and had even decreased in some product categories. He said that this is typical when a market opens up to a number of new companies, but due to economic circumstances, deliveries go fulfilled.

FruitNews article (Russian): http://www.fruitnews.ru/home-page/vegetables/45658-rosselkhoznadzor-nazval-tri-vozmozhnosti-vykhoda-inostrannoj-produktsii-na-rynok-strany.html

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