Vladimir Volchkov: Belarus needs serious monitoring of competitiveness of its consumer goods

Yes, we have quality food products. Yes, they are delicious and useful for the most part. They are respected by foreign buyers. Yes, our processing industry has a great image. Including in foreign markets. It developed long ago, in the early 2000s, when Belarus modernized most of the key enterprises in the food industry. Perhaps one of the first among the post-Soviet republics. And then, 20 years ago, we got ahead. Due to this, it is quite easy to win the hearts of consumers in Russia, Kazakhstan, and other CIS countries.

But are we not resting on our laurels too calmly?! Undoubtedly, the image is a thing inert and relatively stable. And our food industry is growing. But the neighbors are not standing still. And for the production of agricultural raw materials, and the introduction of new technologies in processing, and to improve the quality and stability of products. Russian competitors have taken a big step in the past decade. And our neighbor has already become self-sufficient in all types of meat, being a serious regional exporter in pork and chicken, constantly increasing milk production and processing. Based on this dynamics, in the coming years, even before the end of the five-year plan, at least 1 million tons of milk surplus will be formed on the Union State market. There are already excess capacities in a number of areas: confectionery, pasta, fat and oil ..

Of course, we should be proud of our achievements. And we have them. But do not ignore the fact that neighbors today produce very decent quality products. And it gradually penetrates the Belarusian market and occupies its niches. Including for this reason, the share of sales of domestically produced goods is decreasing. Imports are growing in segments that until recently seemed to be Belarusian. For example, foreign supplies of ice cream are increasing. Imports of the same soft drinks are increasing. And in the future, the pressure will only increase, do not doubt. Russian manufacturers openly declare that the Belarusian market is interesting for them to increase sales of their products.

Recently, representatives of the Russian soft drinks industry came to Belarus. The head of the industry association clearly outlined the picture during her speech. The domestic market of the neighbor is narrowing for several reasons. Almost all categories of soft drinks are in negative dynamics. Some plus is observed only in chilled tea and completely natural juices of direct pressing. But these are very niche products, and they have no significant impact on the overall picture of the industry. The strategy of Russian producers to keep production volumes is export. First of all, neighboring countries, some of them, among other things, are members of the EAEU. Belarus is under increasing import pressure.

Will our manufacturers be able to withstand the onslaught? Do they have the resources and the safety margin? A difficult question to which there is no clear answer yet. Why isn't there one? There are many reasons: both objective and subjective. Unfortunately, there are no strong industry associations in Belarus. For what reasons – a separate long and serious conversation. But the fact remains that imports are on the threshold, but there are no associations. Usually they are engaged in research of different aspects of their own and foreign markets. Competitiveness is assessed according to various criteria and factors. And depending on the result, they come with proposals to government bodies. After all, sometimes it is necessary to adjust the business environment to revive the industry. For our Russian partners, industry associations have already become a powerful institution of state-business dialogue and promotion of industry interests. We have similar structures, we can say that we do not.

To some extent, this is due to the presence of strong power. Key areas of production are supervised by the relevant ministries and departments. And they perform the function of a regulator, an ambassador, and an ombudsman of certain spheres of activity. But the paradox is that government resources are not unlimited. And any serious and systematic research work requires funding. It seems even unfair to shift these costs onto the shoulders of the taxpayer, since it is in the interests of the commercial sector. Although, to give credit, within their capabilities, ministries and departments do a lot. But for an unconditional victory in competition, these efforts may not be enough. However, this issue lies only partially in the area of responsibility of officials. Nevertheless, business relies on the authorities to deal with and solve its problems. And, let’s be frank, he is not very eager to form and finance any cooperative structures.

However, there are also objective barriers. Repeatedly, I saw a picture when some passionate representatives of the commercial sector, realizing all the risks, were ready to pay for research in the interests of the entire industry. Fortunately, we have enough scientific organizations capable of fulfilling such an order. But they ran into an insurmountable obstacle: the lack of primary data for building qualitative mathematical models describing the state of a particular industry. Business entities are not ready to provide information about their activities to either private consulting companies or public research institutions. Even if there is a confidentiality agreement with strict penalties for violations. They don't, period. This mentality of our business, if you will, is a cultural code: low trust. It certainly needs to be upgraded. But it's a very long and painstaking story. Decisions must be made here and now. Otherwise, we risk losing our market. But state bodies business entities provide all information. It is difficult to say with what emotional background, but we are ready to cooperate with industry departments.

Perhaps it is necessary to build some structures of synergy between the efforts of government agencies and commercial structures based on the current reality? And to create appropriate institutions that would seriously address the problem of competitiveness under industry regulators, but with the financing of such research by the commercial sector? I am not going to be a prophet, but, as it seems, otherwise (at least for now) it will not be possible to form tools for managing the domestic market. Perhaps such designs are not ideal. And to some extent, they contradict international practices. Ideally, strong industry associations are needed. But they can be created later. And today we need real actions to preserve the competitiveness of domestic goods.

volchkovvv@mail.ru