‘The mandatory QR code on the dress or blouse will require costs from businesses again’

09:00, 08.06.2023

New requirements for mandatory labelling for products of the light industry was planned to be launched in Russia — from formal suits to knitted wear, handkerchiefs and ties. The list has a total of 13 product groups. However, the initiatives of the Russian Ministry of Industry and Trade were put off for six months. Clothing labelled by Russian producers is designed to remove counterfeit that floods the Russian market, this means it will favour consumers. However, representatives of the sector ambiguously assess the novelty citing big costs and, as a consequence, the rise in price of the end product. Realnoe Vremya’s correspondent figured the situation out.

“The decree hasn’t yet been confirmed by the government”

Russian producers of light commodities were to start labelling their goods. The updated list includes 13 product groups:

coats, outdoor jackets, anoraks, shell jackets and analogous knitted products for women, men and children;
industrial and professional clothes for men and women;
hosiery or knitted products — suits, jackets, blazers, dresses, skirts, pants, onesies, knickers and shorts — for everybody;
knitted fabrics, including artificial fur;
suits, jackets, blazers, pants, onesies, knickers, shorts — for men and boys;
the same, plus jackets, dresses, skirts, skirt pants, pants for women and girls;
men’s shirts — textile and knitted;
blouses, shirts and body shirts for women and girls;
knitted sports suits and skiing suits — for everybody;
other clothes from fabric;
jumpers, pullovers, cardigans, vests and similar knitted products — for everybody;
shawls, scarves, veils, ties, handkerchiefs, except for knitted products;
felt or non-woven materials, impregnated fabrics — for everybody.

Business had to start labelling clothes with QR codes with information about the producer, fabric, item number and other data on 1 June, and it was planned to ban the sale of non-labelled products of these group on 1 September. However, Realnoe Vremya was told in Fair Sign National System that the novelty was postponed — approximately until 1 December 2023.

“This term is approximate again. It can be put off because the decree hasn’t yet been confirmed by the Russian government,” the operator of the Fair Sign mandatory labelling system said.

The sale of goods from the official list without labelling would threaten the producers with serious fines, even criminal charges. Photo: Dinar Fatykhov/realnoevremya.ru

Labelling the products from the updated list wouldn’t tough for many producers — some market players already have experience in this issue and necessary equipment. But the sale of goods from the official list without labelling would threaten the producers with serious fines, even criminal charges and confiscation of non-labelled products. Depending on the type of violations, fines for sole traders are from 5,000 to 10,000 rubles with confiscation, for organisations — from 50,000 to 300,000 rubles with confiscation.

Also, those found guilty can be imposed compulsory labour or imprisonment for up to three years, and if the damage is significant, they could be fined up to 9 million rubles.

To free consumers from fakes

The draft of the dedicated decree was created by the Russian Ministry of Industry and Trade as early as last year. As an explanatory note read, 12.4% of light products were illegally imported to Russia in 2021, a year earlier, this indicator reached almost 12%. The mandatory labelling can help stabilise the situation like in the case of fur labelling, which has been mandatory since 2016. This measure helped to detect and halt the illegal commodity turnover, thus reducing the amount of low-quality products, the authors of the initiative claim.

According to the law, the mandatory clothing labelling was launched in Russia in January 2021. Four product categories turned out to be the first on the list:

clothes, including uniform made of leather or blended leather;
machine or manually knitted blouses for women and girls;
coats, short coats, jackets, winter jackets (including for skiing), wind jackets and similar products — for everybody;
bed, kitchen, toilet clothing.

The Ministry of Industry and Trade considers that the introduction of the mandatory clothes labelling system at production stage guarantees authenticity and product quality for the consumer. Also, any buyer can track the whole journey of the purchased product, while a fake cannot be involved in the circulation.

Nowadays the Russian mandatory labelling system has over 167,700 participants. The labelling mechanism is spelt out on the website of the Centre for the Development of Promising Technologies, which is the operator of this process (Fair Sign). The manufacturer pays for code generation separately for every item. Then the printed Data Matrix barcode needs to be placed on every product — on the label or the packaging. But before this, special equipment has to be purchased: on average, it is a 2D scanner to read QR codes, not to mention a new type of codes created by the centre.

“It is rather about the benefit for the buyer”

There are about 250 clothing enterprises today in the Tatarstan light industry — it is both big factories and small tailor’s workshops. All representatives of this market differently evaluate the idea of labelling several clothing groups. So in a talk with Realnoe Vremya, Irina Kupryakhina, director of Iren tailor shop making school uniform noted that she has an ambivalent attitude to this initiative:

“Firstly, the mandatory QR code on the dress or blouse will require additional costs from businesses — it is additional staff, which is already deficient, costs on buying these labels and so on. In the end this will affect the end price of a product and the consumer’s wallet. This can raise the price by up to 10%. On the other hand, all this black market can be sieved, though we will unlikely get rid of it a hundred per cent. Take some of our markets that seriously depend on clothing from China. It is imported from there and labelled with Russian labels pretending this product is made in Russia. And it turns out that, on the one hand, honest entrepreneurs are cornered within these labelling frames and they work according to the law, but those who brought counterfeit and low-quality clothing will continue doing it. This is why order needs to be put first of all.”

Founder of Alga brand from Tatarstan Timerkhan Ziyatdinov is sure that the introduction of rules for mandatory labelling is still needed for manufacturers. The part of the assortment his company sells is already labelled, this is why the entrepreneur won’t need any costs on the equipment needed to print the codes:

“The state is doing everything correctly, this certainly should be introduced. Look, hundreds of showrooms across the country sell replicas of famous brands they bring from Moscow bazaars, at the same time they don’t use any labelling and certificates. The population then buy these clothes and propagate ‘European values’ without even thinking about it. While real Russian producers who launched businesses from scratch promoted their trademark — there is a sufficient amount of such activists, they give up losing motivation in a fight against global players and lose in the end. In general I am for labelling, but this should be done smoothly, do explanatory work, training, constantly reminding producers about novelties without punishing with fines from the beginning, but warning when detecting a violation.”

Brossko company from Chelny has been making school and corporate uniforms and formal clothes for women for about 10 years now. Today the assortment isn’t yet fully eligible for labelling, notes its Director General Daria Semyonova:

“Clothes labelling is rather about the benefit for the consumer so that they can full information about the product they are buying. In fact, I am not sure some of the buyers really care. All the information about this product, certificates are provided in our stores, but to be honest, I have never seen anybody coming closer and examining it.”

Vice Chairman of the Tatarstan Chamber of Commerce and Industry Artur Nikolayev notes that as for the issues related to mandatory product labelling, many producers say these new trade rules carry additional costs:

“Many producers, for instance, see when buying feedstock at warehouses that the same assortment is sold both as labelled and non-labelled. And there are questions, how did this product end up there and why was there such a possibility? This fact also affects the product price — it is cheaper without the code, of course. Yes, the labelling is convenient for the consumer, they can learn who is the producer, the fabric, the country of origin. But this data was already added to the label barcode. Now this is additional costs for businesses to digitalise products sold in Russia. This entails certain liabilities for sellers too — QR code equipment, update of software or equipment that cannot cope with the new functions.”

Meanwhile, as the operator of the Fair Sign says, the united national labelling system will cover all sectors of the industry by 2024 — from cigarettes and medicines to clothes and baby food. At the moment the pilot project is implemented for medical products, a labelling experiment for some alcohol-free drinks, including juices, started on 1 June and will end in late august, and mandatory labelling is launched in the country for children’s water from 1 September.

Angelina Panchenko

Tatarstan