IMI: LABELLING GOODS IN RUSSIA

1.  PER SPECIFIC REQUEST FROM BISNIS, THE FOLLOWING
IS AN OVERVIEW OF LABELLING PRACTICES FOR FOREIGN
GOODS IN RUSSIA.

2.  WITH THE FAST DEVELOPMENT AND EXPANSION OF
MARKET ECONOMY INTO THE RUSSIAN MARKET, LABELLING
PRACTICES HAVE CHANGED SIGNIFICALLY DURING THE LAST
FEW YEARS.  DURING THE YEARS OF PLANNED ECONOMIC
LABELLING WAS OF NO CONCERN TO FOREIGN IMPORTERS
SINCE THE APPROPRIATE RUSSIAN STATE TRADE
ORGANIZATIONS WERE THE ONLY RUSSIAN BUYERS AND
BECAUSE THERE WERE ALMOST NO IMPORTED GOODS IN
RUSSIA.  WITH THE COLLAPSE OF THE OLD SOVIET
ECONOMIC SYSTEM AND INTRODUCTION OF ELEMENTS OF
MARKET ECONOMICS INTO RUSSIA'S EVERYDAY LIFE, THE
DEMAND FOR IMPORTED GOODS GREW DRAMATICALLY.
FOREIGN GOODS BECAME MUCH MORE POPULAR WITH
RUSSIAN CUSTOMERS THAN THOSE MADE IN THE STATES OF
THE FORMER SOVIET UNION.  HOWEVER, IN RATHER A
SHORT PERIOD OF TIME, BY 1991-1992, THE RUSSIAN
MARKET WAS FLOODED WITH IMPORTED GOODS, QUITE A
NUMBER OF WHICH WERE OF POOR QUALITY.  THOSE TYPES
OF GOODS, MOSTLY IMPORTED FROM CHINA, NORTHERN
KOREA AND OTHER DEVELOPING COUNTRIES, HAD NO
LABELLING AT ALL OR A TYPE OF LABELLING THAT WOULD
NOT SATISFY WESTERN CUSTOMERS, AND WOULD IN SOME
CASES, BE SUSPICIOUS TO THEM.  WITHOUT A DOUBT,
GOODS THAT WERE IMPORTED FROM WESTERN EUROPE, THE
UNITED STATES AND OTHER WESTERN COUNTRIES WERE
EXTREMELY POPULAR WITH RUSSIAN BUYERS AND WERE
USUALLY BOUGHT WITHOUT DOUBTS ABOUT QUALITY EVEN IF
THE LABEL WAS IN ENGLISH AND WAS NOT ADOPTED TO
RUSSIAN STANDARDS.

3.  DURING THE LAST THREE YEARS MARKET CONDITIONS
IN RUSSIA BECAME QUITE DIFFERENT.  SHORTAGES OF
ALMOST ALL GOODS, A THING VERY TYPICAL DURING THE
PERIOD OF PLANNED ECONOMICS AND PARTIALLY THE CASE
DURING THE YEARS OF PERESTROIKA, IS NO LONGER THE
CASE.  CUSTOMERS BECAME MORE DEMANDING AND NOW MAKE
SURE THAT THEY BUY WHAT THEY PAY FOR.  AS A RESULT
OF COMPETITION BETWEEN WESTERN EUROPEAN AND
AMERICAN COMPANIES, AT THE MOMENT THERE ARE VERY
FEW GOODS THAT A CUSTOMER CANNOT GET IN MOSCOW OR
ST PETERSBURG, TWO MAJOR RUSSIAN CITIES THAT ARE
STILL THE BIGGEST MARKETS FOR IMPORTED GOODS FROM
WESTERN EUROPE AND THE UNITED STATES.  IT IS OFTEN
THE CASE THAT AMERICAN GOODS DIFFER FROM SIMILAR
ONES PRODUCED IN WESTERN EUROPE.  THIS IS ANOTHER
FACTOR THAT PROVES THAT PROPER LABELLING IS A MUST
IN ORDER FOR AMERICAN PRODUCTS TO COMPETE WITH
EUROPEAN ONES AND TO BE ABLE TO SELL GOODS
EFFECTIVELY IN THE FAST DEVELOPING AND CONSTANTLY
GROWING RUSSIAN MARKET.  LABELS HELP BUYERS MAKE
ESSENTIAL QUALITY DISTINCTIONS BETWEEN SEEMINGLY
SIMILAR PRODUCTS.

4.  TODAY, SINCE THE MARKET IS FULL OF ALL SORTS OF
IMPORTED GOODS, PROPER LABELLING SHOULD BE TREATED
AS A SIGNIFICANT MATTER.  THE  ANTITRUST LAW OF THE
RUSSIAN FEDERATION REQUIRES THAT ALL LABELS SHOULD
BE EITHER IN RUSSIAN OR IN A FOREIGN LANGUAGE(S)
AND IN RUSSIAN.  PROPER LABELLING IS ALSO EXTREMELY
IMPORTANT BECAUSE THERE ARE QUITE A LOT OF
DIFFERENCES IN RUSSIAN AND AMERICAN MEASUREMENT
SYSTEMS.  SUCH SIZES OF CLOTHES AS S, M, L OR XL
ARE ALSO NOT KNOWN WELL TO A MAJORITY OF RUSSIAN
BUYERS.  THAT'S WHY ALL SIZES SHOULD BE TRANSFERRED
INTO THE RUSSIAN SYSTEM.  MANY AMERICAN FOOD
PRODUCTS STILL LOOK QUITE UNFAMILIAR TO RUSSIAN
BUYERS.  MASTER FOODS, ONE OF THE LARGEST U.S. FOOD
DISTRIBUTORS IN RUSSIA, STARTED LONG AGO EXPLAINING
COOKING DIRECTIONS IN RUSSIAN.

5.  BASICALLY, THE RULES FOR SELLING GOODS
EFFECTIVELY IN RUSSIA ARE UNIVERSAL.  U.S.
COMPANIES ARE ADVISED TO USE THE SAME
PRACTICES/TRICKS OF THE TIDE THEY USE IN AMERICA
OR EUROPE.  TAKING INTO CONSIDERATION THE GOOD
REPUTATION OF THE AMERICAN-MADE GOODS IN THE
RUSSIAN MARKET, THEY ARE VERY LIKELY TO BE SOLD
EFFECTIVELY ONCE THE LABELS ARE ADOPTED TO RUSSIAN
STANDARDS.