Imports make up half of Russian nonfood retail sales, but Russia could make these products itself - minister

MOSCOW. May 29 (Interfax) - Russian companies are capable of increasing production of non-food consumer goods in order to increase the share of domestic products on the market, which currently amounts to only 50% in this segment, Industry and Trade Minister Anton Alikhanov said at the Russian Retail Week forum.

He recalled that after the first wave of sanctions in 2014, Russia pursued a policy of "balanced protectionism" in regard to food products, and as a result the share of domestic food products on the Russian market is now about 80%.

"Now our objective is even more ambitious, because the nonfood sector is bigger, the range of products there is more complex and interest. This is why about half of nonfood sales [in Russia] are now imports. This is about 10 trillion rubles, meaning the market is gigantic, and this is a big space for investment, for development of our own production," Alikhanov said.

"I am confident that we are capable of producing this broad range of nonfood consumer goods. Especially given that in a whole range of areas our capacity is seriously underused, if we're talking about, for example, cosmetics, perfume. In such segments, generally speaking, capacity utilization there is 40% to 60% at various factories, meaning there is room to grow," Alikhanov said.

In order to increase the presence of Russian products in retail, both traditional and online,

a bill has been drafted on the "Russian shelf," requiring a mandatory share of domestic products on store shelves or in search results on marketplaces.

Alikhanov also noted the importance of passing a law on online retail sales, a draft of which has been prepared by senators and State Duma members. Pointing to the growing share of marketplaces, which account for about 15% of retail sales in Russia, he said they cannot "exist outside of the law," but regulation should be moderate and take into account the sector's interests.

"We're not engaged here, not pursuing the goal of tightening the screws. We have always been opposed to any excessive regulation in regard to retail. Therefore, our main objective is transparent rules of the game, balancing mutual relations. It's clear that market power differs greatly between marketplaces, among which it is very great, and small producers and sellers, who have immeasurably less market power," Alikhanov said.