Shoemakers' problems are growing

The annual general meeting of the National Footwear Union (NOBS) was held in Moscow.

On December 4, 2024, the annual general meeting of the National Footwear Union (NOBS) was held in Moscow, in the Technograd Innovation and Educational Complex. The meeting was attended by the heads and owners of footwear companies - members of the NOBS, as well as representatives of the Ministry of Industry and Trade of Russia, the Association of Retail Companies (AKORT), the operator of the marking system of the Center for the Development of Advanced Technologies (CRPT) and online marketplaces - Ozon and Wildberries. Following the meeting, an official letter will be prepared to the Ministry of Industry and Trade of the Russian Federation, in which representatives of the footwear industry and the business community will outline their vision of the current situation on the market and proposals for solving the current problems of shoemakers and retail.

The participants of the annual meeting of NOBS included the heads and owners of the companies Analpa Vostok, Makfine, Rendezvous, Kapris Vostok, Wortmann Vostok, Furla Rus, Easytrans, Axios, Tuffoni, Respect-Online, Steptrade, Tandem, Novard, Union Brands, a representative of the executive branch represented by the head of the department for market analysis and promotion of Russian products of the Ministry of Industry and Trade of Russia Sergey Zhabin, the head of the working group on labeling light industry goods of the Association of Retail Companies (AKORT) Anna Orlova, a representative of the CRPT Olga Nikiforova, representatives of online trade - Deputy Director for Business Process Support at Wildberries Andrey Mikhailyuk and Commercial Director of the Footwear Department at Ozon Olga Moskvicheva.

According to the CRPT presentation on the current status of shoe labeling, held at the event, for the entire period of mandatory shoe labeling, introduced on July 1, 2020, 127 participants in circulation have been registered in the State Information System for Monitoring Goods Circulation (GIS MT, an information system created on the basis of CRPT - Ed.), including: 918 manufacturers, 2 importers, 031 wholesalers, 1 retail companies. At the same time, according to CRPT, among the reasons for introducing labeled shoes into circulation, the leader is production in the Russian Federation (975%), in second place is labeling of leftovers (10%), in third place is import from countries outside the EAEU (import from EAEU member states - 377%, other reasons - 113%). The main reason for the withdrawal of labeled footwear from circulation is retail sales (535%), distance sales (including through marketplaces) - 36%, for personal needs - 29% (cross-border sales are 4%, other reasons - 12%). The sale of goods without labeling has decreased by 61% over the entire period of its validity (more than 14 years), said Olga Nikiforova, a representative of the CRPT.

The participants of the meeting questioned the figures presented by CRPT concerning the huge share of Russian production in the mass of labeled footwear. In their opinion, this is where the serious problem of pseudo-Russian manufacturers is hidden, which must be identified, says Anna Orlova, head of the working group on labeling light industry goods at AKORT.

"The statistics on the increase in the number of Russian manufacturers looks dubious, since this is a direct loophole for smuggling," says NOBS General Director Yan Belyaev.

Following the presentation of the CRPT, the main topic of discussion for business representatives was the problem of grey imports and counterfeit goods on the Russian footwear market.

"It should be noted that mandatory labeling did not whiten the shoe market, but rather complicated logistics. Labeling did not solve the problem of smuggling, moreover, it facilitated the penetration of illegal products and counterfeits into the Russian Federation," says Armen Avetisyan, CEO of the company "McFine".

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Parallel imports, permitted by the Russian government in 2022 and designed to solve the problem of shortages of goods after the departure of many foreign brands from the Russian market, have contributed to the fact that under its guise, the flow of counterfeits into the country has sharply increased. Due to the low price, contraband, counterfeit footwear is displacing labeled products of bona fide manufacturers from the Russian market. These, as well as a number of other objective factors, contribute to the fact that domestic production, unable to withstand such strong pressure and high tax burden, is declining.

"Different market participants may be in different situations and conditions, but at the same time some equality for all entrepreneurs should really come. Because otherwise, some entrepreneurs are forced to make very difficult decisions about closing production. It is production, shoe factories in Russia that are currently under maximum pressure," said Sergey Sarkisov, CEO of the Novard company (brand EKONIKA), assessing the situation.

According to Sergey Sarkisov, there is no single center in the country today that would monitor the situation with shoe labeling and track all violations in the shoe trade. "We are talking about all retail chains and all retail falling into the legal field and working like everyone else, that is, selling only labeled shoes. It is necessary to draw the attention of government agencies to this problem," he stated.

The participants of the meeting outlined all the acute problems of the footwear market that exist today. Based on the results of the discussion, a consolidated position of NOBS and AKORT will be developed and formulated, an official letter to the Ministry of Industry and Trade will be prepared, which will once again set out the proposals of the union member companies to stabilize the situation on the market and support Russian companies, primarily Russian shoe manufacturers - reducing the tax burden on them and creating equal conditions for competition with online platforms (marketplaces).

NOBS is counting on the state's attention to the problem and political will to solve it.

The representative of the Ministry of Industry and Trade assured those present that the department is open to dialogue with the business community, is ready to assist and help companies in crisis situations in every possible way, and to protect the interests of Russian companies at all levels.