Marking shoes in Russia: The market is not ready, but will have to work

    Mandatory labeling of goods in Russia is gaining momentum: from July 1, its new stage will start, which will directly affect all manufacturers, distributors and sellers of shoes. Despite the experiment conducted since last year, market participants still have questions for the lawmakers. What - they told the Pilot in the article.

    Technical part of marking

    Obligatory labeling of shoes will begin to operate in Russia from July 1, 2019, and from June 1, 2018 to June 30, 2019, a pilot experiment is ongoing that will help the authorities to finalize the system. At the moment, as is often the case, the requirements for it are still shining white spots.

    As part of the mandatory labeling, every pair of shoes that goes on sale in our country will have to have a digital passport (DataMatrix code). It will allow the authorities and customers to trace the entire path of a particular product: from the moment of its production until the moment of sale.

    Who is involved in labeling shoes:

    • shoe manufacturers;

    • importers;

    • retailers and wholesalers.

    Who is responsible for organizing shoe labeling:

    The project is supervised and controlled by the operator of the Center for the Development of Advanced Technologies (MDGP), the Ministry of Finance, Digital Development, Industry and Trade, Tax, Rospotrebnadzor, FCS and FSB

    What kind of DataMatrix code: DataMatrix

    code will be placed on each package of shoes. It consists of:

    • an identification code that determines the position of the goods in the marking system of a single catalog of goods (GTIN, which is issued by GS1);

    • individual serial number and crypto-tail, which protects against fakes. It is generated by a special system operator that must be installed for each legal entity;

    • Product Recognizer - the first 4 characters of the code of the Commodity Nomenclature for Foreign Economic Activity of the Eurasian Economic Union. With it, the system finds out what kind of product was marked;

    • “Electronic signature” used to control the disposal of goods when selling using an online cash register - 31 labels will be printed on the label. If you have problems with reading at the checkout, the seller can enter it manually.

    How the marking and tracking process takes place:

    • the shoe manufacturer sends a request for an identifier to the MDR operator;

    • It generates a unique crypto-protected barcode and transfers it to the manufacturer;

    • DataMatrix code is applied to the packaging of shoes;

    • when importing goods, selling them, moving and even writing off DataMatrix code is scanned;

    • All this information is contained in the information base;

    • codes are removed from it after shoes are withdrawn from circulation.

    Note that each DataMatrix is ​​unique and cannot be repeated.

    Why labeling shoes is needed:

    As indicated on the website of the Honest Sign labeling system , labeling shoes will “effectively deal with counterfeit and smuggling, protect legal businesses and consumers, and also allow the government to increase tax collection”.

    The news from January 17 on the "Honest Sign" states that "more than 500 applications for participation in the experiment were filed ( for marking shoes - the note" Pilot "), more than 140 turnover participants are already registered in the system and over 2 million marking codes have been issued. The participants of the pilot project on footwear are setting up software, testing, in addition, marking of goods released both in Russia and outside the EAEU. ”

    There is no clarity as to how the system will work.

    The network of shoe stores Obuv Rossii entered the pilot labeling experiment as early as September 2018. “From the side of the company, we are ready to start testing the project - we have the necessary software and hardware. The theory spelled out how the marking procedure will be carried out, and in general, everything is clear. However, with regard to implementation and practical implementation, it is not yet clear how the system as a whole will function. We must first test everything, identify possible problems at this stage, correct them, and then we can say that we are fully ready for the labeling start, ”said Natalya Pauli, head of the public relations department of Obuv Rossii Group .

    Speaking about the technical preparation for mandatory labeling of shoes, the company clarifies that Obuv Rossii needs to partially update the Srikhkod scanners in those stores that have been working for a long time so that they read not only linear, but also two-dimensional codes.

    In general, Obuv Rossii has a positive attitude towards labeling. “We fully support the government’s initiative to introduce mandatory labeling in the footwear market. It is actually present counterfeit, especially true for the economy segment. Marking will help make the market more civilized and competition more fair. In addition, the labeling will serve as a certain guarantee to the consumer that he purchases goods with a transparent history, clear origin and expected quality, ”says Natalia Pauli.

    However, not all retailers are so optimistic. In the United Colors of Benetton apparel and footwear network, the labeling law caused a number of difficulties.

    “Our main difficulty lies in the fact that we sell imported products that are produced outside of Russia. And not in any one enterprise, but in dozens of countries. In theory, manufacturers will have to label products. But how can we give them this opportunity - to equip their enterprises with marking equipment or to send already generated DataMatrix codes to production? We need to resolve this issue, ” Mikhail Medvedev, a lawyer at United Colors of Benetton stores , shared his thoughts .

    In addition, United Colors of Benetton has yet to update the fleet of commercial equipment installed in stores. “Most likely, we will purchase additional equipment. They say that they will issue some special online cash registers that can read DataMatrix codes. Perhaps we will manage with their strength, ”Mikhail Medvedev suggests.

    In general, United Colors of Benetton is quite neutral about the law on mandatory labeling of goods. “In our network, we have never encountered the counterfeit of clothes and shoes. So it is difficult to assess the need for mandatory labeling. Experts believe that this law is needed to increase fees to the treasury. If you look at the question from this point of view, the mechanism, of course, will work well. However, the goals that are being voiced do not correspond to the goals for which this system is being introduced, ”Mikhail Medvedev concluded.

    The fact that retailers are not yet ready to introduce mandatory labeling of shoes is understood by the authorities. “The working group on shoe labeling includes all key Russian manufacturers, and now the system is being worked out. On imports, of course, while there are questions. But everything is clear on the products manufactured in Russia. We cooperate with “Obuv Rossii”, “Paris Commune”, “Econika” - they are all participants of the pilot project. And they have no questions. The Center provides individual managers with them who work with them, go to their factories, install equipment. If we talk about shoe stores, they will have to change one-dimensional scanners in favor of two-dimensional ones. I think that 80-90% of shoe retailers have to do it, ”saysAnna Orlova, head of the working group on labeling and traceability of AKORT, deputy chairman of the design and expert group on product labeling at the interdepartmental industry group on combating illicit trafficking in light industry products of the Ministry of Industry and Trade .

    Distributors in the chain

    With importers of shoes in Russia, for the time being, not everything is simple. On the territory of our country, the goods should arrive already marked - moreover, it should already be as such by the time it enters the customs service. Not the fact that small foreign manufacturers immediately technically be able to label the goods. Therefore, this task so far will fall on the shoulders of distributors.

    “We are a carrier of shoes for hundreds of small foreign manufacturers. Since there are no analogues of mandatory labeling of goods, our customers are confused: they do not understand what they need to do, ”said Alexey Chernyshev, commercial director of the Authorized Economic Operator of AKFA .

    According to him, manufacturers are only accustomed to the requirements for regular updating of online cash registers, as they now need to upgrade equipment and software to comply with the labeling rules. “But it is inevitable. After all, in a few years the situation should arise: either you label the shoes on the production, or you do not supply it to Russia, ”said Alexey Chernyshev.

    AKFA is participating in a shoe labeling experiment, and it shows that a legislative initiative will force retailers to think seriously about IT. And while the experts see the problem of the qualifications of the IT staff of the companies stated in the procedure. However, the state has its solution. True, paid. “For those who do not have their own IT services, or those who could not agree on labeling of goods with manufacturers, TPCT has planned the Center for Etiquette and Labeling - a company that will label goods for money. Either these services will be provided by companies like AKFA - it is already actively developing labeling technology, ”explained Alexey Chernyshev.

    So, labeling shoes will be a serious test for Russian retailers. We recommend not postponing, but in advance to attend to the issues of compliance with the stated requirements, test and adjust the necessary business processes and equipment. In this case, for your store labeling shoes will not be a traumatic shock.

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