GENERICO.ruScienceMikhail Dubin: product labeling brought in more than a trillion rubles

Mikhail Dubin: product labeling brought in more than a trillion rubles

Textiles, beer, milk, caviar, antiseptics and bicycles – all these products are united by labeling. The head of the Honest Sign system operator, the Center for the Development of Advanced Technologies (CRPT), Mikhail Dubin, spoke in an interview about how marketplaces now work with illegal goods, new domestic developments and patents, and whether the labeling system has a future outside Russia. Interviewed by Anna Shavyrina.
– You have been labeling goods in Russia for five years. We started with tobacco, and today 17 categories are already labeled. How do you assess the first results of the five-year plan? How much did it bring to the budget?
– At the end of 2023, the amount of additional revenues to the country’s budget and legal businesses from labeling exceeded one trillion rubles. And yes, in June it will be five years since we have been working on the principles of a public-private partnership agreement; we have another ten to go.

– What contributed the most to this amount?

< br />– About 800 billion of this trillion is the fiscal effect. That is, taxes, fees, excises, and so on, so excise groups bring the greatest effect. In terms of numbers, this is, of course, tobacco – about 30% comes from it. In general, since the introduction of labeling, tax revenues from tobacco products have more than doubled.
At the same time, the market whitening, which is estimated based on the dynamics of production and import of legal products, amounted to 11%. During the implementation of the system, 45 illegal tobacco factories were closed in the country, and 18 production facilities were legalized. In addition, today Russia is probably one of the very few countries in the world, if not the only one, where all tobacco products are subject to labeling strictly in accordance with the recommendations of the World Health Organization.
– And what category caused most problems at the marking launch stage?
– For us, each category is like a child. You cannot say that you love someone more, someone less, someone more problematic, and someone less. Each of the industries where this process began taught us a lot. For example, we have learned to implement labeling much faster. If you look at dairy products, the implementation there lasted more than two years, but in sweet water the process last year was within six months.

But, of course, there were challenges that we managed to overcome. For example, with cigarettes we are faced with a very high production speed – up to two thousand packs per minute, and in dairy products – with a variety of form factors and types of packaging. Now in Russia, thanks to the introduction of marking, the world's largest system of 120 packaging manufacturers has been deployed, which are capable of applying dynamically changing code during the production of this packaging at a very high speed.

Something interesting I've seen recently is an aluminum can. Many people said that it was impossible to find a solution for labeling such cans. But we were the first in the world to make a system that allows us to apply a code to an aluminum can using lasers at a speed of up to 80 thousand cans per hour. Of course, with the support of the authorities. To do this, I had to change the key on these banks. But in the end, we patented this technical solution in Russia and are now filing international patents.
– Are there any problems with lasers in this regard? What about equipment and materials for marking in general?

– We heard the first mass concerns in March 2022, but even then there were no particular grounds for them, because at that time about 80% of the codes were applied to domestic equipment or equipment from friendly countries. Of course, there was a certain dependence on import supplies, but we made efforts to resolve this issue. Among other things, a program was launched to localize equipment, a warehouse of equipment and the most popular consumables was formed – our own warehouse with a minimum supply for six months.

At the same time, the digital marking system itself today is one of the largest digital projects not only in the country, but also in the world. It processes almost 600 thousand transactions per second – this is more than Uber or Netflix.
– Should we expect the launch of new experiments in the near future? In what categories?
– Voluntary experiments are already being conducted on 14 types of goods. In addition, we are waiting for the government’s decision on low-alcohol products, cables, laptops and smartphones. And the total volume of goods that are currently included in the labeling system is about 15% of the country’s non-commodity GDP.

– How is your relationship with marketplaces now? They often receive complaints due to low-quality or non-original products.

– We are actively developing cooperation with marketplaces; agreements have been concluded with all major players. Even that year, marketplaces became full-fledged participants in the turnover of antiseptics, wheelchairs, dietary supplements, medical products, soft drinks and light industrial goods. Sites now have the responsibility to transmit data on the turnover of labeled goods to the system, as well as monitor compliance with labeling requirements on the part of suppliers. The intermediate results of this joint work are as follows: facts of violations according to the labeling system were confirmed in 92% of received complaints. Of these, in 40% of cases, marketplaces issued a fine to the seller, blocked the product or issued a warning, in 60% the seller was informed about the violation with a requirement to eliminate it. To date, no repeated violations have been recorded.
From September 1 of this year, by decision of the government, similar rules for online platforms will apply to six new groups of goods: shoes, photographic equipment, tires, perfume, dairy products and packaged water.
– I can’t help but ask about the loud one the case with the Armenian mineral water “Jermuk”, which occurred in February. Has the investigation been completed? Is it clear how this could happen to the labeled water?

– The investigation is still ongoing. I would like to note that in this difficult situation, it was labeling that helped take prompt measures and stop the risks of spread. On behalf of Rospotrebnadzor, it was possible to quickly determine the location of potentially dangerous products and block their further retail sale. And for consumers, a warning notice was added to the “Honest Sign” application.

– What about the transfer of labeling system technologies? At what stage is this process? Which countries are expressing their interest in this?
– If we talk about other countries, we are working in the EAEU space, and Uzbekistan is also already using Russian technologies. We are ready to scale further; we are receiving interest from different countries.
– Do you already have an idea of ​​how the technology transfer of the labeling system will take place? Will Honest Sign start working directly in other countries? Or do you just want to share your experience?
– Any scenario is possible. But it is important to understand that, firstly, the operator will always be local, because the system contains a large amount of sensitive data. Therefore, a direct presence there is not expected, but technology transfer is quite possible. And since we are still talking about a system that provides great benefits for the state, each country is interested in a certain customization of the system for itself. Therefore, this is not some kind of boxed solution, like, say, Microsoft Office, which can be used the same all over the world. In this case, of course, each system will have its own characteristics.

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