Cherkizovo Group takes part in State Duma's expert council to combat unfair expert organizations

July 2, 2019

Moscow, Russia – July 2, 2019 – Cherkizovo Group (MOEX: GCHE) was an active participant at the meeting of the Agricultural Sector Economics expert council for the Duma’s Committee on Economic Policy, Industry, Innovation, and Entrepreneurship discussing how public opinion on the quality of agricultural products in Russia is assessed and shaped.

The meeting was led by Aleksei Balyberdin, Member of the State Duma and Vice Chairman of the expert council. The attendees included representatives of the Ministry of Agriculture, the Ministry of Justice, the Russian Federal Antimonopoly Service, Rospotrebnadzor, Roskachestvo, the National Union of Swine Breeders, the National Union of Poultry Farmers, the National Dairy Producers Union, the National Meat Association, the Seafood Processors Union, the Union of Russian Sugar Manufacturers, the Association of Confectionery Manufacturers, the Retail Companies Association (ACORT), the Scientific Research Institute of Nutrition, as well as Magnit, and Billa retails chains.

The council discussed the recent coverage by the traditional and online media of unauthorized product quality audits conducted by various companies as well as reputational damage to bona fide manufacturers caused by the actions of a number of independent organizations conducting food audits. The discussion was focused on the quality and reliability of the audits run by the so-called independent expert organizations and the coverage of their results in the media.

Irina Bragina, Deputy Head of Rospotrebnadzor, commented: “According to expert organizations, such as Rospotrebnadzor, the situation in the country is stable. However, pseudo-expert organizations are literally destroying the market by using inappropriate research methods and releasing unreliable results. We call it ‘consumer terrorism’ and are making efforts to combat these organizations.”

Very often, buyers become biased because of the product ratings compiled by expert organizations that run product audits. But are all of these experts authorized government agencies, and do they really conduct audits in an honest manner?

“Currently, there are several official state control systems that monitor product quality and operate within the legal framework. They include Rosselkhoznadzor, Rospotrebnadzor and Roskachestvo,” highlighted Elena Ageyeva, Head of Quality and Standardisation at Cherkizovo Group. “When conducting an audit, these organizations strictly comply with the legal rules in terms of sampling, research, and reporting results to manufacturers. They are transparent and seek to improve quality and protect consumers. For us, as responsible manufacturers, interaction with these expert organizations is an important key to improving the quality of products,” she commented.

All other organizations that run the so-called independent food audits are unfair commercial projects that use “ros” in their names, which is against the Russian laws. Organizations such as Roskontrol do not have the required expertise or relevant resources to conduct any research. What they do affects the already imperfect dietary structure of Russian consumers. Approximately half of Roskontrol's audits focus on animal source products, such as meat, fish, eggs and dairy products. Manufacturers are not informed about testing programs or plans and do not receive test reports which, as a rule, contain negative information. It is difficult for an average consumer without professional expertise to understand the nuances and assess the reliability of information. In this way, the image of protein products as the core of a healthy diet is damaged.

Research conducted by pseudo-experts not only causes great reputational damage to products manufactured by Russian companies for the domestic market, but also undermines the nascent reputation of Russian exporters in international markets.

The council proposed amendments to existing regulations, in particular, Decree No. 52 of the Government of the Russian Federation On Approval of the Rules for Including “Russian Federation” or “Russia” or any Derivative Words in the Registered Name of a Legal Entity dated February 3, 2010.