Marketing analysis of import substitution within the framework of the food embargo: aspects of economic security of the Russian Federation. The Russians are coming: Marketing of the era of import substitution Marketing of the era of import substitution

In Belarus, by Decree of the Council of Ministers dated December 30, 2011 No. 1779, the list and production volumes of import-substituting consumer goods for 2012 were approved. It was decided to divide the goods that, according to the government, especially need import substitution, between ministries and concerts, the rest - between regional executive committees. Now government agencies are making their plans in this direction, taking into account the so-called scheme of work to replace goods imported into the country.

Yuri PSHENNIK

The government has set a target of including at least 60% of non-critical imports in the scheme. The list of goods that Belarusian enterprises must master the production of in 2012 is impressive in its diversity and the lack of logical prerequisites for production. Although, as stated in Resolution No. 1779, “the consumer characteristics of goods must ensure their competitiveness and correspond to the best world analogues, taking into account the proposals of the Ministry of Trade.” The Belgospischeprom concern, for example, is obliged to start producing “chocolate products in the shape of a hollow egg”, in other words, domestic “Kinder surprises”. List imported goods, analogues of which the government intends to begin producing at Belarusian enterprises, is very impressive. There was a place in it for LCD TVs, scooters, coffee pots, electric irons, strollers for dolls, pots, leather clothes and even rakes.

It is not said who will buy all this variety with the “Made in Belarus” brand. Experts’ assessments of the “import substitution” idea of our government vary widely, although there are many more negative opinions. Let's approach this issue from a different angle. It is very important to decide not only what to “import substitute”, but also how. This may be even more important. Therefore, let’s try to take a look at the marketing aspect of “import substitution”.

Be different or perish

“Be different or perish,” says marketing guru Jack Trout. If we apply this to our import substitution, we can state that our “import-substituting” copies will not withstand direct competition with the world’s leading brands. And the conditions for participation in the SES and, in the future, in the WTO will not allow us to directly prohibit or overly restrict the import of goods from abroad. And even if they were allowed, it would hardly help much. In the USSR there was such a ban, and everyone who wanted it wore “foreign” jeans and listened to Philips cassette players. And this was under the then Iron Curtain. But our borders are still open - especially in the east. So bans won't work. Therefore, we will have to withstand competition, for which, as I already mentioned, our “import-substituting” goods are not ready. What options could there be?

Let's take for example “chocolate products in the shape of a hollow egg” (hereinafter referred to as “Kinder”). If you make it exactly the same, you will have to sell it much cheaper than the original, because it has a global image and fame. The analogue will have a rather negative image, and even a reputation as a fake, regardless of the quality. After all, when comparing direct analogues, people always look for why the fake is worse than the original. And they always find something, even if the fake is actually better than the original. Nowadays, this sometimes happens. At the same time, the cost of the analogue will be higher, since we will never achieve significant production scales comparable to global transnational corporations. As a result, the domestic project will most likely turn out to be unprofitable.

Therefore, it is advisable to do not a direct analogue, but something on the theme of “Kinder”, but not completely identical. For example, not an egg, but an apple or a cube, or maybe a native potato. Instead of direct competition, there will be indirect competition, since both products are located in the same market niche. True, here people will also look for differences, but in this case they will benefit our product. Anyone who wants to give their child something more original and patriotic will buy a “non-Kinder”, especially if it turns out to be cheaper. In the case of complete copying, cheaper is definitely perceived as worse. Our “non-Kinder” will be able to take its place in it, which means that there will be less import of original “Kinders”. This is real, and not just for show, import substitution. But such ideas need to be worked on and paid for accordingly.

In this regard, the large-scale entry into the market in the 50s of the last century of a drink from the “cola” series - “Pepsi” is indicative. How did they manage to undermine the Coke monopoly? The drinks were similar, although not identical. At the same time, Pepsi relied on promoting the differences between its drink and Cola, and not on the fact that it is an almost identical substitute. Pepsi chose a “narrow section of the front” to break into the market, rather than launching an offensive “along the entire front.” Initially, Pepsi relied on youth. Those who are older probably still remember the slogan “Pepsi - Generation Next”. That is, “Cola” is for old people, but young and progressive people drink “Pepsi”. And, finally, Pepsi was cheaper, just finally, and not only that. Quite quickly, Pepsi became the second largest producer of cola drinks in the hierarchy, and very quickly a short time they even managed to slightly dislodge the leader. But “Cola” didn’t sleep either, however, that’s another story. But if Pepsi were positioned as a complete “substitute” for cola, as we are trying to do, there would be no success, even short-term. Given a choice, people choose the original over the fake. When we immediately emphasize that this is “non-Cola,” people look for why it is better than the original. And many find it, especially if you give them the right advice.

Let's go back to Jack Trout: "When attacking a larger competitor, you need to identify it strengths and try to avoid collisions in this direction.” We do the opposite, we oppose the competitor where he is strongest. And we do this consciously, and not out of ignorance. But any lieutenant knows that attacking the enemy’s strongest position is madness, especially for a “partisan” who is also much weaker than his competitor.

When a competitor cannot be defeated, you need to team up with him

Another option is not to fight against global brands, but to unite with them, organizing joint production on your territory. Thus, Coca-Cola and Fanta in Belarus are produced by the Coca-Cola company itself, just as BMW cars in Russia are produced by the BMW concern. This is precisely the correct “import substitution”, and at the same time investment. There is no direct competition with global brands, but rather cooperation and support. Including material, which is especially important for us today. This option is quite clear. The only question is whether global brands will agree to cooperate with us. But you have to try if the first option doesn’t work out. Because the production of complete analogues of foreign goods, and very often 90% of them from foreign raw materials and components, but under their own little-known, or even known from the negative side, brand - import substitution is incorrect. Including from a marketing point of view.

It all started as usual: with an emotional decision, coupled with incompetence and short-sightedness and covered up by traditional hypocrisy. Yes, I'm talking about the food embargo and its unpleasant consequences.

Although the food embargo was officially introduced as an asymmetric response to Western sanctions and was presented under the guise of supporting domestic producers, first of all, it seems to me, it was a slap in the direction of the “creative class.”

In this sense, everything worked out flawlessly. First of all, I really feel humiliated that I can’t just go and buy my favorite gorgonzola at the store and eat it with honey and a glass of good wine. Secondly, I am absolutely sure that those responsible for making this decision are still not denying themselves anything. And thirdly, a huge number of compatriots, for whom the words “Parmesan” and “jamon” are almost abusive, joyfully supported this decision. Bingo! Another elegant multi-move, Putin outplayed everyone.

There is only one problem in this whole story, and it is that the victory turned out to be Pyrrhic. Demonstrating truly Jesuitical sophistication in domestic political intrigues, our government again and again stumbles over its lack of understanding of the laws of economics and the motives of behavior of normal people.

When, in its infinite wisdom and concern for the public good, the government introduced an embargo on the import of beef, pork, poultry, fish, shellfish, dairy products, as well as vegetables and root vegetables into the Russian Federation, it immediately became clear to everyone except this very government: the price will rise, oh how the price goes up.

Moreover, everything will become more expensive at once: prohibited and permitted, imported and domestic. This is how our economy works, in which 36% food products imported. And you don’t need to understand macroeconomics; it’s enough to grow up in this country to understand such things intuitively, at the level of genetic memory. And then reflexively run to the store, buy buckwheat and stewed meat while they are still available.

What did the government do to avoid price increases? Correct: it organized a commission tasked with “ensuring balance commodity markets and prevent the acceleration of price increases for agricultural products, raw materials and food.” An absolutely logical decision, by the way.

Firstly, at least some kind of imitation of activity needs to be created so that there is something to communicate to the electorate.

Secondly, the commission is a special format of work in which it is impossible to find those to blame when nothing comes of it.

Thirdly, even a hedgehog understands that no commission will hold back prices, so a streamlined dummy formulation is used “to prevent growth from accelerating.” That is, if prices first increase several times, and then only by 50%, then everything is fine, the commission managed it.

You know as well as I do how much food prices have actually gone up; it doesn’t even smell like an official 6-7%. (How official inflation statistics may differ from real ones and why, I already.) For example, in the Samara region, prosecutors compared prices in August and December 2014 and found that cabbage, cucumbers and peppers had risen in price by 353%, 544% and 654%, respectively . Over the same period, the cost of buckwheat increased by 276%. Meat products, frozen fish, cheese, sour cream and potatoes increased in price by over 50%. In January, the price increase continued: in 22 days, the price of tomatoes increased by 26%, cucumbers by 48%, carrots by 58%, and grapes by 85%.

Why are prices rising?

Two reasons led to the rise in prices: the food embargo and the depreciation of the ruble.

Let's start with the obvious: retail chains they preferred to purchase imported products not at all out of a desire to ruin the long-suffering domestic producer. The reasons were ridiculously banal:

it is simply cheaper to buy products of comparable quality abroad;
at a comparable price, the quality of imported products is disproportionately higher;
Many imported products simply do not have a sane domestic analogue.

We’ll talk about why this situation happened later, but for now let’s just think about the consequences of the embargo. There are also exactly three of them:

rising prices (due to switching to more expensive suppliers or shortages);
reduction in the quality of available products;
disappearance of entire categories of goods from shelves (for example, hard cheeses).

With the fall in the ruble exchange rate, everything is also simple: purchase prices for imported goods in foreign currency remained unchanged, in rubles they almost doubled. In addition, the price includes the expectation of a further fall of the ruble. After all, if trade company buys products for foreign currency, sells for rubles and between the purchase and sale the exchange rate manages to rise, then instead of profit the company risks making losses. Who needs it?

With “domestic” goods the story is similar, only the cause-and-effect chain is a little longer. It’s not for nothing that I put the word “domestic” in quotes: in the cost of almost any locally produced product there is something imported: seeds, fertilizers, Technical equipment, packaging materials and so on. Until we finally turn into North Korea, the price of any domestic product will depend to a greater or lesser extent on the ruble exchange rate.

In the meantime, while the border is not closed and the export of domestic goods is possible, another strong factor is at work: the price of this product abroad. (First of all, this applies to exchange goods: grain and fertilizers, but this factor also affects the rest.) It makes no sense for a manufacturer to sell his goods cheaply to a domestic buyer if they are willing to buy it abroad and pay more.

It is obvious that no import substitution, even if it is three times successful, can reduce the price as long as there is an alternative sales market in which products can be sold at a higher price.

The Empire Strikes Back

In addition to such purely decorative measures as organizing various commissions, the government has several more ideas on how to curb price increases:

replacement of “bad” foreign suppliers (Europe and America) with other, “good” ones;
the notorious import substitution and support for domestic producers;
fighting windmills; administrative regulation of the market.

Let's figure out which of this is realistic and which is not and what consequences await us.

Change of suppliers

To understand that this is practically impossible, just look at the world map of agricultural zones. The color indicates the percentage of land used for planting (darker means more), the numbers indicate the area of the zone in millions of hectares.

The largest and most well-developed agricultural zone is in the United States and covers southern Canada. Next - Europe and southern Russia, Kazakhstan, the Middle East. All that remains besides what has already been listed is China, India, a little bit of South America and a tiny piece of Australia. You don’t even need to take Africa into account.

We have banned ourselves from importing products from Europe, the USA, Canada and Australia; India exports almost nothing, leaving China and South America.

China exports quite a lot of food - about $36 billion a year, which is approximately equal to the exports of Spain, almost half the exports of France, Germany or Holland, and three times less than the food exports of the United States.

Any country (even a large exporter) simultaneously imports food - well, bananas and apples cannot grow equally well in either direction. So Holland produces and exports significantly more food than it imports (79 versus 49.5 billion dollars). On the contrary, China imports twice as much as it exports, which means it makes no sense to count on it as a supplier of products.

South America is good for everyone, except for two things: small production volumes (only Argentina is noticeable with its 35.7 billion dollars), which they sell perfectly well without us, and geographical remoteness, which fundamentally increases the price. Actually, this is the most distant point in the world from us.

Conclusion: replacing current suppliers of imported products is almost impossible and will certainly lead to higher prices.

Import substitution

Well, the time has come for awesome stories and import substitution is one of my favorites, right after nanotechnology and modernization, and it’s not even clear which story is more awesome than the others.

As you already know, we live in the largest country in the world and all other countries envy us. Together with Crimea, the area of the Russian Federation is 17,124,442 km2. Then come Canada, China and the USA.

And this is a map of agricultural lands in the Russian Federation.

Agricultural lands occupy 196.2 million hectares, and arable land itself - 115.1 million hectares, which is approximately 6.7% of the entire territory. Why so few? Because up to 65% of the territory of the Russian Federation is occupied by permafrost. The best thing that can grow on it is moss and stunted shrubs.

The productivity of crop production depends very much on average annual temperatures, and the average annual temperature in the Russian Federation is a harsh minus 5.5 degrees Celsius. For comparison: in

Finland +1.5 degrees. Helsinki, St. Petersburg and Moscow have the same average annual temperatures: +5C. In the warmest agricultural center of the Russian Federation - Krasnodar - +12. In the USA the average is +12, in Germany +8, in France +12, in Spain +15.

This means that we will never, under any circumstances, get the same yields as in the USA and Europe. That is, even with absolutely similar labor productivity, the cost of domestic products will always be higher than imported ones.

Speaking of productivity: in Canada, two people can fully operate a 200-cow farm. For us, this is something from the realm of legends and traditions - on a farm of this size, we only have two people: the chairman and Chief Accountant, and besides them, another 20-30 people work there: milkmaids, machine operators, watchmen, mechanics, veterinarians and God knows who else. All this ultimately increases the cost of production.

What about Canada? Labor productivity in the agricultural sector of the Russian Federation is approximately two times lower than in our other industries: share Agriculture in Russia's GDP - 4.7% (2009), and the share of people employed in agriculture - 10% (2008).

Another factor that increases the cost of domestic food products is our vast expanses. More precisely, a long transport shoulder. Take, for example, the banned Norwegian salmon. What can replace it? That's right: ours, the Far Eastern ones. How much can it cost?

The answer is very simple: exactly as much as it can be sold locally to the Japanese, plus the cost of delivery to central Russia. The distance from Vladivostok to Moscow along the highway is 9141 km, in a straight line - 6417 km. At the same time, from Oslo (Norway) to Moscow is 1953 km, and in a straight line - 1644 km. The difference is four times for a product that must be transported in refrigerators. It’s obvious where it’s more profitable to ship from.

Now about the time factor. Laws will be written soon, but things will not be done soon, especially in agriculture. It takes 15-20 months to fatten a bull, otherwise the game is not worth the candle. Guess for yourself how long it takes for fruit trees to grow. The notorious Parmesan matures from 12 to 36 months, provided that the technology for its production has already been mastered.

I once happened to see an interview with a Dutch cheesemaker who talked about how his company has been producing Maasdam cheese for 30 years, and now they have finally managed to ensure that the holes in it turn out exactly as needed. Thirty years to obtain the highest quality product in a country with centuries-old cheese-making traditions! How long will it take in the homeland of the legendary Poshekhonsky, Russian and Kostroma cheeses? Most likely, I simply will not live to see this moment.

Well, God bless them, the cheeses. Let's talk about vegetables. 65-70% of vegetable products, all rice, more than 20% of feed are produced on reclaimed lands, which occupy 7.9% of the total area of arable land. The condition of these lands is quite deplorable: more than half of the irrigation systems (2.4 million hectares) are in need of reconstruction, more than a third of the drainage systems (1.9 million hectares) are in an unsatisfactory reclamation condition. To increase vegetable production, you must first at least put in order what has been destroyed.

So, the best we can hope for in the field of import substitution of agricultural products is to get required amount products of more or less decent quality, but still more expensive than imported ones, for which it will be necessary to increase the production of milk and meat by about 30-35% of the current volume, vegetables and fruits - by 100% or more.

This will require large-scale land reclamation, construction of new farms or restoration of old ones, purchase of agricultural equipment, and increase in capacity Food Industry, purchase of additional quantities of young animals, seed material, fertilizers, fuels and lubricants. All this is connected with enormous capital investments, which will begin to yield returns only in a few years. State help would be of no help here. Moreover, even Europe, which is extremely prosperous in comparison with us, does not forget to subsidize its agriculture, spending 40-50 billion euros per year on this, that is, approximately 3 trillion. rubles

I’ll say right away: 3 trillion is more than the entire gross product in agriculture, hunting and forestry in Russia, which amounted to 2.4 trillion in 2014. rubles The figure is prohibitive for us. If we spent that much on subsidies, then our products would not only be free, we would also be paid a little extra for them in the store.

In fact, the government plans to spend 2 billion rubles in 2015 on discounts on domestic agricultural machinery and another 2 billion on leasing subsidies. This is approximately 1:1000 of EU subsidies to its agricultural producers. How realistic it is to catch up and overtake them at such a pace - decide for yourself.

Expecting to boost agriculture with credit money is all the more pointless - not only do loans for our producers, thanks to games with a key rate, cost many times more than for European ones, but there is not much to take them on: during the years of stability, many agricultural enterprises have already taken everything loans that they could, pledging almost everything they had against them. Nobody will give them new ones in such a situation.

Since money is not working out very well, our state copes as best it can, and for this it has several administrative tools from the category of “prohibit and not allow”:

Export duties on fertilizers and agricultural products;
Fixing prices for socially significant goods;
Elimination of the institution of trade intermediaries;
Limitation of trade margins;
Requirements for the minimum assortment in retail outlets.

Actually, the mechanism has already been launched:

The FAS and the prosecutor's office are still under the illusion that prices can simply be taken and adjusted on command. On January 23, the head of the Federal Antimonopoly Service (FAS) Igor Artemyev cheerfully reported that they had opened 98 cases of overpricing. At the same time, the FAS cannot explain how exactly the service determines the validity or unjustification of price increases and how it treats manufacturers’ arguments about the large foreign currency component in the cost of domestic products.

Retail chains may be prohibited from direct purchases of imported products. The corresponding bill is planned to be presented for discussion during the spring session of the Russian parliament, as reported by TASS with reference to the Deputy Chairman of the Federation Council Committee on Agricultural and Food Policy and Environmental Management Sergei Lisovsky.

From February 1, Russia introduced an export duty on wheat in the amount of 15% of the customs value plus 7.5 euros, but not less than 35 euros per ton.

The Ministry of Agriculture did not lag behind and also offered two options to help farmers: introduce export duties on mineral fertilizers or freeze domestic prices for them. Concerned about the prospect of introducing duties, fertilizer producers promised not to raise prices and did right choice— only 10-25% of their production volumes go to the domestic market.

In Nizhny Novgorod, intermediaries (distributors of agricultural products) were blamed for rising prices and retailers were asked to purchase them directly from producers.

Deputies from " United Russia“We plan to limit trade markups on socially significant goods, as well as limit the return by retail chains of socially significant goods that were not sold before the expiration date.

The government already has the opportunity to fix retail prices for up to 90 days for “socially important” goods and can be used at any time.

Do you want to know what will happen as a result of such “support”? Yes, you yourself probably know:

A sharp decline in the profitability of those few producers who have a real export prospect and who could develop, grow, and create jobs.
An increase in prices for goods that are not included in the list of “socially important” in order to compensate for the losses of retail chains.
Shortage of goods, prices for which will be fixed. Manufacturers will hold on to them, and consumers will buy them up while they can.
Retail chains will find themselves between two fires: on the one hand, an increase in purchasing prices, on the other, fixed selling prices. When they want to give up unprofitable goods, they will be forced to keep this assortment on the shelves under the threat of losing their retail license. Many will think that it is time to close.
Fighting with intermediaries will only worsen the situation. Distributors are the circulatory system for retail. These are warehouses, transport, packaging, sorting. Of course, you can buy products from the manufacturer without them, but what will you do if you need three bags of potatoes in Moscow, and the manufacturer only sells them by the wagonload, self-pickup from Krasnodar?

In short, if all the government’s ideas are implemented, then we will get exactly what the USSR ended with - cards and coupons, shortages and queues. For general development, you can read what is happening now in Venezuela, another major oil exporter.

Oh yes! My friends complain that lately I have been writing only about bad things, but now I want something positive, life-affirming. Therefore, I would like to end with good news: there is one category of our compatriots who, even in this difficult situation, will definitely be able to increase their well-being. These are employees of the prosecutor's office, the federal antimonopoly service, and many other supervisory agencies, whose representatives are already happily knocking on the doors of greedy retailers, heartless exporters and treacherous distributors, preparing to collect a bountiful harvest from them. Let us rejoice at the new successes of the officials and security forces who guard our interests!

Update 04/03/2015:

Restricting the import of products has not yet helped Russian farmers - many have even reduced investment programs, Andrei Oleynik, managing director of agribusiness at Basel and head of the board of directors of the Kuban holding, told RBC.
The Russian Guild of Bakers and Confectioners (ROSPiK) complained to the Federal Antimonopoly Service about regional authorities freezing prices in retail chains. They argue that such measures lead to the death of business.
The Baltika brewing company (part of the Carlsberg Group) plans to sell plants in Chelyabinsk and Krasnoyarsk that were shut down in January. Previously, Baltika adopted a moratorium on hiring employees and increasing wages.

Update 13/03/2015:

Producers in China and India did not meet expectations for the volume of meat supplies to Russia after the country introduced a food embargo, said the head of Rosselkhoznadzor Sergei Dankvert.

There would be no happiness, but misfortune would help! Macroeconomic trends current year gave the Russian manufacturer a unique chance to bring domestic products to the market and increase its share in sales volume. The slogan “buy Russian” in the wake of the rise of patriotism has become a magic password and a reset point for the Russian market in the B2B and B2C segments.

Business district "Romanov Dvor"

10. 00 – 15. 00

Program

Practical cases of leaders - 2017

Russian creative: launch of the “Time to Shine” campaign

Anastasia Gorodnicheva, marketing manager for the Wrigley chewing gum category in Russia

And here we are! Brand communication based on national charisma

Natalya Yafizova, Marketing Director, PRODO

Creating a successful brand: a family approach

Evgeny Vakhrameev, Marketing Director, Cheburashkin Brothers

Marketing success of Natura Siberica

Andrey Trubnikov, founder of Natura Siberica

Kvass instead of Coca-Cola: an atelier instead of a ready-made dress store

Andrey Barannikov, CEO communications agency SPN Communications

Creating a best-selling product in the era of import substitution

Ilya Balakhnin, CEO, Paper Planes

Questions for the panel discussion:

Competition between domestic companies and global giants: where to start?
The secret of success: a review of fast-growing Russian companies
From the region to the capital market: strategy and tactics for progressive growth
Golden rules for entering retail networks
Prospects for the development of real-time marketing technology in the domestic market
How to create a successful brand and change the rules of the game in the market?
Effective promotional campaign for any budget: the best case studies
10 steps to successful growth in the Russian market in 2017

Public talk with special guest:

Celebrity marketing in Russia: trends and brands"

Tetushkin Vladimir Alexandrovich
candidate technical sciences, associate professor, department economic analysis and quality,
Tambov State Technical University
Tetushkin Vladimir Aleksandrovich
candidate of technical sciences, associate professor, sub-department of economic analysis and quality,
Tambov State Technical University

Annotation: The relevance of the study is explained by the fact that Russian President V. Putin extended the food embargo until December 31, 2017. The import ban on certain products was introduced in response to Western sanctions in the summer of 2014. The purpose of this study is marketing analysis of import substitution and foreign trade as part of the introduction of the Russian food embargo. Materials and methods. In this paper, various aspects of import substitution in the Russian Federation are analyzed using econometric methods. The source of data for the analysis was the reporting of Rosstat and customs statistics. Results. The scope of the results covers Scientific research for students and teachers, as well as as recommendations for the management of the Russian Federation and food organizations. Conclusions. The embargo created opportunities to expand domestic production. Production dynamics, however, show that despite the wide potential for import substitution (in the form of imported products leaving Russian markets), its implementation is currently carried out locally, mainly in the meat and dairy production sector, which also stimulates the development of processing enterprises. Success in increasing domestic production is largely due to earlier investments. The extension of the food embargo for another year provides an additional opportunity for domestic producers both to adapt to the difficult economic conditions in the country and to implement the import substitution process.

Abstract: The relevance of the study due to the fact that Russian President Vladimir Putin extended the food embargo until 31 December 2017. The ban on the import of certain products was introduced in response to Western sanctions in the summer of 2014. The purpose of this study and marketing analysis of import and foreign trade in the framework of the introduction of the food embargo of the Russian Federation. Materials and methods. In the present work using econometric methods to analyze different aspects of import substitution in Russia. The data source for the analysis was the reporting of customs statistics and Rosstat. Results. The scope of the results covers research for students and teachers, as well as recommendations for the management of the Russian Federation and food organizations. Conclusions. The embargo created opportunities for expansion of domestic production. Dynamics of production, however, shows that despite the wide potential for import substitution (in the form of departures from the Russian market of imported products) currently its implementation is a point, mainly in the sector producing meat and dairy products, which stimulates the development of processing enterprises. Success in increasing the volume of domestic production is largely due to previously made investments. The extension of the food embargo for another year provides more opportunity for domestic producers to adapt to difficult economic conditions in the country and to implement the process of import substitution.

Keywords: marketing, analysis, security, food, economics, embargo

Keywords: marketing, analysis, security, food, economy, embargo

Introduction

Russia introduced a trade embargo as a counter-sanction to the restrictive measures of Western countries, which were initiated in connection with the annexation of Crimea and the situation in the Donbass. Putin signed a decree restricting the import of certain products from the US, EU, Canada, Australia and Norway in August 2014. Later it was extended to Albania, Montenegro, Iceland and Liechtenstein, which joined the anti-Russian sanctions. At the end of last year, Ukraine was included in this list. The ban included supplies of beef, pork, poultry, fish, cheeses, milk, fruits, vegetables, as well as some other categories of products.

Let us analyze the sources on the topic under study. The work provides an assessment of the economic situation that has developed on the market for agricultural goods as a result of the embargo imposed by the President of the Russian Federation on the import of food products from a number of foreign countries. The article examines the possibilities of import substitution in the market of meat and meat products, the emergence of which is due to the food embargo and the depreciation of the ruble; it has been proven that in the production of poultry and pork, import substitution can be considered successful; the sources and reasons for the high dependence of the Russian market on imported supplies of beef have been identified, which do not seem likely to be overcome and ensure import-substituting growth of the industry in the near future. The article examines the changes that have occurred in the Russian food market after the introduction of the sanctions regime by Western countries and counter-sanctions in Russia: a reduction in imports and a change in the structure of suppliers, more complex lending conditions for agricultural producers, the degree to which domestic products fill emerging product niches, differentiation in the development of individual industries, a decrease in the level of food consumption nutrition of the population, growth of food inflation.

The article analyzes import substitution in the field of agricultural production as a process; Attention is drawn to the lack of established and sustainable trends in the active development of domestic agricultural production as a reaction to the food embargo; indicates a weakening of economic and food security in the context of the devaluation of the ruble, a decrease in domestic demand, rising food prices and an increase in the level of its availability for the population. The article examines the situation on the food market after the introduction of an embargo for the EU countries, the USA, etc. in August 2014. The purpose of the study is to find ways to harmoniously combine various elements and mechanisms in the agri-food sector. An analysis was made of the main types of food imports (meat and dairy products).

The dynamics of macroeconomic indicators and their forecast for the short term indicate that the country’s economy is unlikely to set foot on the trajectory sustainable growth. However, according to estimates of the Ministry of Economic Development of the Russian Federation, in 2016-2018. the average annual growth rate of food exports may reach 4.5%. Political factors, namely sanctions from Western countries and Russia’s response measures (food embargo), gave impetus to the development of the agro-industrial complex: domestic enterprises had the opportunity to increase the volume of products produced, replacing imported food that had left the market. Analysis externally economic factors import substitution indicates that, taking into account the current trends in the world market (population growth, urbanization, agflation) and the presence of untapped potential for food production in the country, the orientation of the Russian agro-industrial complex towards the foreign market should be among the priority strategic goals of its development. The development of the modern agro-industrial complex at all levels of economic management is considered in the context of import substitution in connection with the sanctions announced by the United States and the West and the food embargo by Russia as a response measure. The government has approved a road map to promote import substitution in agriculture. The purpose of the article is to assess the potential of the Russian agro-industrial complex, trends in achieving threshold values of food independence, determine the methodological and practical conditions and possibilities for implementing the import substitution roadmap, the volumes, timing and growth rates of achieving the set goals.

The article describes the challenges facing Russia in connection with the introduction of an embargo on the supply of food products from a number of foreign countries and its accession to the Eurasian Economic Union. The introduction of a ban on the supply of food products from the countries of the European Union, the USA and Australia marked a new era in Russian agricultural policy. The food embargo caused food prices to rise and total imports in dollar terms to fall. In general, Russia’s import dependence on food is quite stable over the years: in the period from 2002 to 2014. it fluctuated in the range of 11-13%. At the same time, Russia is major exporter food. The food embargo also influenced changes in the goals of Russia’s agricultural and food policy. The article outlines the authors' positions on the problem of import substitution related to the sectoral sanctions against Russia announced by the West and the United States and, in response to them, a food embargo. This problem has become Russian economy in the current geopolitical situation, the most acute and considered at all levels and in almost all spheres of the real sector of the economy, primarily in basic industries, the food complex and in the financial sector.

1. Marketing analysis food inflation during the period of import substitution in the Russian Federation

The food embargo introduced in 2014 created an opportunity for import substitution on the part of domestic producers, however, despite the existing potential in this area, in the short term, the possibilities for its implementation turned out to be limited and were characterized mainly by the trends of past years. At the same time, due to the rather large domestic European market and small volumes of exports to Russia, only certain European producers of cheeses, vegetables and fruits, as well as fish were in a vulnerable position from the introduction of the embargo. In response to the sanctions imposed against Russia by Decree of the Government of the Russian Federation of August 7, 2014 No. 778 “On measures to implement the Decree of the President of the Russian Federation of August 6, 2014 No. 560 “On the application of certain special economic measures In order to ensure the security of the Russian Federation, a ban was introduced for a period of one year on the import into the Russian Federation of a certain list of agricultural products, raw materials and food, the country of origin of which is the United States of America, the countries of the European Union, Canada, Australia and Norway. By Decree of the Government of the Russian Federation of June 25, 2015 No. 625, these measures were extended for a year, and an additional ban was introduced on the import of lactose-free dairy products supplied not for dietary therapeutic or preventive nutrition, and food or finished products made using cheese production technologies and containing 1.5% or more milk fat. This bulletin will examine the implications of the introduction of these measures for the domestic market, as well as the structure of trade flows.

The introduction of retaliatory counter-sanctions by Russia led to a significant increase in prices on the domestic market, which subsequently intensified due to the devaluation of the Russian national currency. Thus, over a year and a half by May 2015, food inflation reached 28.7% (relative to prices in December 2013). The main growth occurred in November 2014 – February 2015. It was during this period that the contribution of the depreciation of the ruble against the main world currencies was maximum and provided, according to conservative estimates of the Analytical Center, up to 1/5 of actual food inflation. The rest are almost 20 p.p. price increases are due to objective annual inflation, as well as the corresponding behavior of producers and business entities involved in trading activities, in conditions of limited import supplies to the Russian market.

Figure 1 — Consumer price index for food products, as a percentage of the corresponding period of the previous year

Source: Rosstat, Analytical Center for the Government of the Russian Federation

Consumer prices for all key socially important goods grew by double digits over the year. In May 2015, average consumer prices for beef increased by 23% compared to May 2014, for pork - by 22%, cheese - by 20%, for frozen whole fish - by 38%, carrots - by 39%, apples - by 37%, for cereals and beans - by 49.2%. It is noteworthy that prices for goods that were not subject to the embargo grew at no less a pace: the price of sugar increased by 52.2%, for sunflower oil - by 23.7%, for pasta - by 21.6%.

A noticeable increase in prices for pork (and, consequently, for the closest substitute - poultry meat) and fish was noted in the first half of 2014, including in connection with restrictions on the import of these goods introduced by Rosselkhoznadzor. Thus, the embargo only strengthened previously established price trends in the meat and fish markets. In turn, the increase in prices for dairy products and apples was a direct result of a reduction in the supply of imported products and reduced competition in Russian markets.

Figure 2 - Meat prices, rub. per kg

Figure 3 - Prices for fish, rub. per kg

Figure 4 - Prices for dairy products and eggs, rub.

Figure 5 - Prices for vegetables and fruits, % compared to the same month previous. of the year

Source: Rosstat

Let's analyze production and import substitution in the Russian Federation.

The introduction of the embargo created an opportunity for import substitution on the part of domestic producers, but the potential for import substitution in the short term was far from being fully realized. The reasons lie in a number of objective economic factors, including:

— the production of a number of products, such as cattle meat and fish, is associated with long payback periods for investment projects.

- the production cycle may significantly exceed the annual embargo period, which negatively affects incentives to invest in production capacity. The announcement of a one-year extension of the embargo increases incentives for producers to invest, but the planning horizon is again limited to a one-year period.

— rising interest rates have significantly limited the ability of producers to attract loans not only for investment, but also to replenish working capital.

— costs have increased for the purchase of imported raw materials for production: hatching eggs for poultry farming, breeding livestock and feed additives in dairy farming, fry and fertilized salmon eggs, potato seeds, sugar beets, and corn. In addition, feed prices are expected to rise. Food production increased in only a few categories and was able to partially replace prohibited imported products. Positive dynamics are observed in meat production; growth is achieved mainly due to pig and poultry farming. It should be noted that the increase in meat production is mainly due to investments made earlier in the industry. The growth of domestic production of pork and poultry meat in January–April 2015 exceeded the volume of import reduction for the same period (Fig. 6). There is no such increase in production for beef; moreover, at the end of 2014 there was a sharp reduction in the number of cattle. According to Rosstat, the production of livestock and poultry for slaughter (in live weight) in farms of all categories in January - April 2015 amounted to 3,985 thousand tons or 106.5% of the corresponding period in 2014, while the production of cattle increased by 0.8%, pigs - by 3.9%, sheep and goats - by 2.4%, poultry - by 11.1%. The volume of meat production, including by-products, in January-April 2015 increased to 680 thousand tons (+13.5% compared to January-April 2014), poultry meat - up to 1.4 million tons (+12.7 %), sausages – up to 477 thousand tons (+0.6%). In the fishing industry, there is a significant decrease in the production of fresh and chilled fish, while the production of frozen fish has increased, largely compensating for the lost volume of imports (Fig. 7). Such a sharp reduction in the production of fresh and chilled fish is largely due to the high dependence of domestic enterprises on foreign fry and fertilized salmon eggs, the import of which decreased noticeably at the beginning of 2015, in particular due to the weakening of the ruble.

Figure 6 - Change in imports and volume of meat production in January–April 2015 compared to January–April 2014, thousand tons

Figure 7 - Change in imports and volume of fish production in January–April 2015 compared to January–April 2014, thousand tons

Source: Rosstat, Federal Customs Service of Russia

Figure 8 - Change in imports and production volume of dairy products in January–April 2015 compared to January–April 2014, thousand tons

Source: Rosstat, Federal Customs Service of Russia

Figure 9 — Production of main types of livestock products, thousand tons

Source: Rosstat, Federal Customs Service of Russia

Domestic dairy producers have not yet been able to sufficiently compensate for the lost import volumes in the short term. top scores demonstrates the production of cheeses and cottage cheese (Fig. 8). However, it should be noted that the growth trend in cheese production has been observed on the domestic market since 2013, which suggests that this result is also more likely a consequence of earlier investments, and not so much the result of import substitution. In addition, the discrepancy between the volumes of available raw materials and the growth in cheese production may indicate that such a sharp increase may be partly due to an increase in the production of counterfeit products. The Russian Ministry of Agriculture nevertheless notes the development of dairy cattle breeding. In January – April 2015, farms of all categories produced 8.9 thousand tons of milk (100.7% compared to 2014). The stability of its production is maintained despite the reduction in the number of cows in agricultural organizations (as of May 1, 2015, the number of cows amounted to 3.3 million heads, -2.7% compared to 2014) due to an increase in their productivity (in agricultural enterprises) to 1,663 kg (by 6.8%). The increase in the production of livestock and poultry for slaughter in agricultural organizations has a positive impact on the work of processing enterprises. Production index food products, including drinks and tobacco for January - April 2015 amounted to 102.5% against 101.2% for the same period in 2014, including the production of meat and food by-products of slaughtered animals increased by 13 compared to the same period in 2014 .5%, chilled semi-finished meat (meat-containing) products - by 11.3%, processing and canning of fish and seafood - by 7.3%, processing and canning of potatoes, fruits and vegetables - by 3.1%, production of plant and animal products oils and fats – by 0.3%, butter – by 8.7%, cheese and cottage cheese – by 15.6%, cream – by 9.6%. Thus, an analysis of the dynamics of domestic production shows that the increase in volumes in certain sectors is the result of previously made investments, however, due to objective reasons, the increase in production is not enough to compensate for the lost volumes of imports. In turn, the virtual absence of imported goods in the markets ensured demand for manufactured products from domestic manufacturers, which might not have existed in conditions of fair competition with imports, which provides the basis for increasing domestic production.

2. Marketing analysis of changes in foreign trade of the Russian Federation

With the introduction of the embargo, the volume of food imports into Russia decreased significantly, and the trade structure of imports also changed somewhat. In the commodity structure of imports to Russia, the share of imports of food products and raw materials for their production in January–April 2015 amounted to 13.1%. The value of food supplies decreased by 41% compared to January–April 2014 (the total volume of imports decreased by 38%). Changing the structure of imports to Russia An analysis of import dynamics in January-April 2015 shows that there is a significant reduction in import volumes for all food categories subject to the embargo. For a number of products, partial replacement of the falling volume of imports occurs, but for the majority of product categories, such replacement does not occur either due to an increase in supply volumes by traditional foreign suppliers, or due to the emergence of new ones. In January-April 2015, for all embargoed products, without exception, there was a significant reduction in import volumes compared to January-April 2014. Thus, imports of fresh or chilled beef decreased by 17%, frozen beef - by 34%, pork - by 57%, chicken meat - by 46%, fresh and chilled fish - by 81%, frozen fish - by 45%, fish fillet - by 30%, dried and salted fish - by 1%, milk and cream without adding sugar - by 37%, milk and cream with added sugar - by 6%, butter - by 68%, cheeses and cottage cheese - by 62%, potatoes - by 10%, carrots, beets, etc. - by 29%, apples etc. - by 40%.

Meat . In the import of fresh and chilled beef (HS code 0201) to Russia, the Republic of Belarus increased its share from 76% in January-April 2014 to 90% in January-April 2015, however, in absolute terms, the volume of imports from the Republic of Belarus is almost did not change. The main importers of frozen beef (HS code 0202) remain Brazil and Paraguay. At the same time, imports from Brazil decreased noticeably - the share decreased from 61% to 50%, and in in absolute terms During the period under review, imports decreased by 46%. Imports from Paraguay remained virtually unchanged in absolute terms, with the share increasing from 21% to 33%. Brazil remains the main supplier of pork to Russia, the share of imports from which increased from 39% in January-April 2014 to 76% in January-April 2015. However, in absolute terms, imports from Brazil decreased by 17%. Thus, supplies that previously came from Canada, which accounted for 37% of imports in January-April 2014, were not replaced by anyone from foreign countries. A similar situation is observed in the chicken meat category. The share of the Republic of Belarus in supplies to Russia increased from 25% in January-April 2014 to 55% in January-April 2015, however, in absolute terms, the volume of supplies increased by 17% (by 5.4 thousand tons). Brazil almost doubled the volume of supplies to Russia, thereby increasing its share from 10% to 30%. The total volume of imports to Russia decreased by almost the amount supplied in January-April 2014 from the United States.

Figure 10 - Structure and volume of imports of fresh and chilled beef to Russia (HS code 0201), thousand tons and %