Russia's edible oil producers debate the way forward

In contrast, just 10 per cent of producers feel that the standard (GOST) will effectively hurt dishonest processors.

These are the findings of consultancy firm Market Advice, which interviewed the leading 40 Russian eatable oil producers about the possibility of replacing imported fats with domestic fats. The firm, which spoke to major companies including Eurooil, Efko-Sloboda and Krasnodar, conducted the survey over the last two months.

Many respondents are against the possibility of replacing imported fats in the production of margarine and spreads with domestic ones. Some believe that Russian producers will never have raw materials of very high quality, and that the new GOST will lead to lower standards of quality.

These firms argue that Russian oils used in the production of margarine and spreads can only replace imported ones if production parameters are changed, and consumers become attached to domestic products.

The survey revealed that the industry is divided over how such changes can be achieved. Half of the respondents believe that manufacturers need to enter professional alliances with other edible oils and milk manufacturers. This support, said one company, is needed "especially by new companies whose brands have not yet been promoted".​

For example, Solnechnie Produkti recently revealed the results of its investment programme at the Novosibirsk edible oils (NZhK) plant, which joined the holding company in 2004. Since the NZhK became a Solnechnie Produkti member, the holding has invested about $2 million in the plant.

As a result, NZhK's production has increased by 46 per cent - the highest figure in the sector,. Sales increased by 40 per cent compared to the previous year.

Novosibirsk Eatable Oils Plant is the biggest in Siberia enterprise producing mayonnaise and margarine, and is currently the fifth largest plant in the sector.

The other half of the industry however believes that independent work produces the best results because, said one, "there is the freedom to choose the quality of raw materials you want and not to follow the rules set by a holding company".​

The Market Advice survey was carried out for the Russian Butter 2004 event, which is took place in Vologda from 15 to 17 December with support from Vologda district governor Vyacheslav Pozgalev. More than 250 Russian and foreign companies are participating in the event.

Russian Butter-2004 is dedicated to 165th anniversary of Nikolai Vereschagin, the renowned butter producer who formulated the world famous Vologda butter. The exhibition is intended not just to commemorate Vereschagin, but also to promote the fact that Vologda uses the latest scientific and production developments in the manufacture of butter.

More information on the survey results can be requested by emailing Market Advice at katrin@market-advice.ru.