New customs duties on shoes: whose interests do officials protect?

On November 21, 2011, at a meeting of the subcommittee on protective measures in foreign trade and customs and tariff policy, chaired by First Deputy Prime Minister Viktor Zubkov, it was decided to increase the Euro component from 1,8 euros / pair to 2,5 euros / pair in relation to Import duties on certain types of leather shoes.

Thus, at the December meeting of the Customs Union Commission 3 different points of view will be presented: the Republic of Belarus proposes to close the market for imports - 20%, but not less than 2,7 euros / pair, the Republic of Kazakhstan - against tariff changes, Russian officials - contrary to economic realities market made their decision. Understanding how severe the consequences of increasing customs duties for consumers and legal market players can be, the National Shoe Union intends to seek a review of the decision.

Even before the official discussion of the issue by the Russian side, the National Shoe Union, as well as Russian retailers and importers of shoes, opposed the increase in customs duties. In particular, experts noted that such a decision would result in a significant increase in prices for consumers and an increase in the share of the shadow shoe market, which today is about 40%. At the same time, barrage measures, as practice shows, do not stimulate Russian shoe manufacturers. So, since 1996, the volume of production of leather shoes has not practically grown, and today, together with the state order, it makes up only 3% of the volume of consumption. “At the same time, the range of products is very scarce and amounts to 10% of the population consumed. There is no production of model, heeled women’s shoes, modern sports shoes, ”said Natalia Demidova, Director General of the National Shoe Union.

An increase in the duty on cheap shoes will lead to higher retail prices and an even greater financial burden on low-income people who will be forced to return to clothing markets. Small and medium-sized businesses operating in this segment will suffer.

“At present, the average Russian, who has an income lower than the European, is forced to buy shoes at a higher price. But, apparently, this is not enough for officials, ”said Natalya Demidova. “The proposed measure will not lead to an increase in the production of domestic products, but will cause a new wave of corruption, smuggling, and reduce taxes to the budget.”

In connection with the decision of the subcommission, the National Shoe Union plans to hold a “round table” in early December with the participation of leading economists and representatives of the shoe business. The meeting will discuss the place of Russia in the global shoe business based on the results of the World Shoe Congress and a consolidated position will be worked out on the issue of effective measures for the development of the Russian shoe market as a whole.