Labeling Slows Down Rise in Prices for Dairy Products

The introduction of mandatory labeling has slowed down the rise in prices for dairy products, the Higher School of Economics (HSE) said in an analysis, Russian media reported.

Before the introduction of labeling, ice cream rose in price in March-June by 3.5%, after the introduction of labeling (June-September), the price growth slowed down to 3.2%. Cheese rose in price by 0.9% and 0.7%, respectively.

At the same time, prices for dairy products that are not subject to the mandatory labeling requirement grew faster.

In particular, butter rose in price in March-September by 1.4%, sour cream – by 3.4%, cottage cheese – by 3.3%.

“Labeling leads to a decrease in the cost or slowdown in the dynamics of price growth for products due to whitewashing of the market and reducing price volatility, depending on the turnover of illegal products, the prices of which cannot be controlled,” the HSE notes.

The rise in prices for dairy products is associated with the rise in prices for raw materials, packaging, imported veterinary drugs, electricity, and the depreciation of the ruble.

In addition, prices for milk and butter are rising due to lower yields of forage crops.

Mandatory labeling of cheeses and ice cream was introduced on June 1, 2021. On September 1, the second stage of labeling of dairy products with a shelf life of more than 40 days began.