Global diaper majors operating in Russia may bear significant losses in the local market this year, due to a recent decision from the Russian Constitutional Court, the highest court in Russia, to legalize parallel imports in Russia.

In its official statement the court said companies that prohibit imports and sales of their products in Russia create conditions for the monopolization of the market and receive unreasonable advantages over local competitors, while the latest decision of the court is addressed to solve this problem.

The court’s decision means local importers will get a permission to import goods without the permission of brand owners. According to a spokesman from the court, parallel imports could be recommended if a producer deliberately drives up prices for its products or imposes any restrictions on the imports and sales products in the Russian market.

According to analysts’ assessments, the permission of parallel imports may negatively impact the Russian businesses of global diaper producers, among which are Procter & Gamble, Kimberly-Clark, Essity and some others, which control almost 98% of the Russian market and which could be faced with serious difficulties after the influx of cheaper, duty-free imports to Russia, mostly from the former Soviet states, China and other Asia-Pacific states.

Russian officials have long been arguing whether parallel imports could harm the Russian economy and local businesses of global corporations. One of the major initiators of this proposal became the Russian Federal Antimonopoly Service (FAS). In 2015, it convinced the government to allow parallel import of certain products, particularly drugs, children’s products and auto parts. At that period of time the FAS wanted to bypass the sanctions’ regime, hoping the resuming of supplies of those products and technologies to Russia, which imports, so far, have been impossible due to sanctions.

According to the latest decision of the Constitutional Court, the list of goods, parallel imports of which analogues to Russia, will be expanded and will include such consumer goods as diapers, feminine care products, beauty care products and other similar goods.

In the meantime, the decision of the court has already been criticized by all major players in the Russian diaper market and similar products. Producers said each of them operate their own production facilities within the territory of Russia and are in the list of major taxpayers in the country.

Alexey Popovichev, CEO of Rusbrand, a public association that unites Russian producers of consumer goods and global majors operating in the country, comments, “It is not clear how the customs officers will decide whether to let such a product go, and the courts – to determine whether the price for it is excessive. The prices for the same goods in different countries can differ significantly.”

Parallel imports creates more risks than benefits, warned the European Business Association: it will reduce the investment attractiveness of the country and will result in the imports of counterfeit products to Russia. Analysts also believe lifting of the ban on parallel imports could also be explained by the maintaining sanctions’ regime against Russia by the European Union and the U.S.

Currently, producers are conducting talks with lawyers, preparing a petition to the Russian Prime-Minister Dmitry Medvedev, asking him to give a closer look on the current situation.

Techtextil Russia Celebrates 10 Years
Techtextil Russia will celebrate its 10th anniversary this year. The four-day event will be held March 20-23 in Moscow and will attract members of the global nonwovens and technical textiles industry.

In Russia, the technical textiles industry is experiencing strong development which is reflected by a significant increase in projects financing and support of large-scale investors, both foreign and domestic. 

Technical textiles and equipment for its production remain the major factor in the development of the Russian textile industry, and 2017 has been marked by some crucial positive impacts on the Russian market, i.e. textile industry was getting governmental support, at both regional and federal levels; innovative materials were developed and improved; and a number of new plants were launched.

In 2018, four top events will be once again co-located at the Expocentre fairgrounds within the “Russian Textile Week,” including:

• Techtextil Russia – International Trade Fair for Technical Textiles, Nonwovens and Protective Clothing;
• Inlegmash – International exhibition for textile manufacturing and processing;
• Interfabric – International exhibition of fabric and textile materials;
• International forum of textile industry “Legpromforum-2018.”

The fifth edition of the International Forum of Textile Industry – “Legpromforum-2018” will be launched within the “Russian Textile Week,” and among others comprise a symposium on Technical Textiles. Techtextil Russia is also developing a specialized extensive fringe program. It will address key market challenges and prospects, as well as industry trends and updates for the development of technical textiles and nonwovens in various applications areas.

The last edition of Techtextil Russia in 2017 successfully demonstrated and proved the high status of the exhibition and its international recognition. In 2018, the exposition will be highlighted with national pavilions of Germany, China, Italy and a united European pavilion. Pavilion participants will demonstrate their best production and up-to-date services. The National Pavilion of Italy supported by ACIMIT (the Association of Italian Textile Machinery Manufacturers) will be for the first time organized at Techtextil Russia uniting a wide range of Italian producers.

Techtextil Russia will open new prospects for business development. The most prominent technical textile innovations will be demonstrated by such foreign market leaders as Birla Cellulose (India), B.J. Geo-Textile (Bangladesh), Dakota Coatings (Belgium), Fiab (Italy), JR Corporation (South Korea), Tespra (Italy) and many others.

A significant exhibition part is devoted to the local textile industry. Visitors will have the chance to meet the leading Russian companies stands: Aleko-Polymery, Coats, Gazprom Khimvolokno, Ivanovoiskozh, YKK, Yuman, Z-tex, and others.

In 2017, Techtextil Russia welcomed 5584 professional visitors from 28 countries, 48% of them were new unique visitors. About 68% of all visitors were decision makers, 82% of visitors achieved their business objectives, and 93% say they were planning to visit Techtextil Russia 2018.

The organizers of the “Russian Textile Week” are IEC Expocentre and the Russian Union of Entrepreneurs of Textile and Light Industry, the official partner is Messe Frankfurt RUS.
In 2017, Techtextil Russia included 67 companies from 10 countries, including Belarus, Belgium, China, India, Italy, Poland, Czech Republic and Russia. Many companies participated in the exhibition for the first time reflecting the constantly growing importance and popularity of the fair and its professional recognition.

Michael Jaenecke, director Brand Management Technical Textiles & Textile Processing at Messe Frankfurt, underlined the effectiveness of combining the leading industry events on one site: “We are happy to be part of the Russian Textile Week with Techextil. We think, that—despite of its young age—the Russian Textile Week has very good prospects to become the main platform for exchange of information in the region. From my point of view, combining all sectoral events on the same platform and at the same time, offers the opportunity to cover the maximum of topics and to discuss all relevant trends relevant to the market.”