|                                                                                                                                                             |  | MARKET FOR U.S. MEATS REMAINS SOLID IN RUSSIA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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|**BISNISHome PageSearchBISNISEmbassyReportsCountryReportsIndustryReportsPublicationsSourcesof FinanceLeadsand EventsExchangeRatesState ExportsOtherSources** |  | June 1997by Joan MorganAmerican food products have a strong and widespread reputation for quality in Russia, although
they face major challenges regarding certification and labeling, as well as high import duties. 
Recent U.S. experience with chicken exports has shown that these challenges can be overcome,
however.  The success of U.S. poultry and pork exports and weak local competition means a
promising market for these products in Russia for the next several years.  Small and medium-sized
exporters can find opportunities in exporting meats to Russia, especially to regions outside of
Moscow and St. Petersburg.Meat products were the United States' largest export to Russia in 1996, totaling $991 million, an
increase of 39 percent over 1995.  Last year poultry accounted for $912 million worth of total
U.S. meat exports to Russia, which is the largest overseas market for U.S. poultry.  Pork exports
declined somewhat in 1996, but future prospects are good if regulatory issues can be resolved. 
Shipments of prepared meat and fish, including sausage--the seventh largest export category last
year--were worth $136 million, an 86 percent increase over 1995.Certification, Labeling, and Tariff Issues
Exporters of U.S. meat and poultry products face a variety of regulations in Russia.  Certification
issues regarding U.S. poultry were the subject of intense, high-level negotiations between the U.S.
and Russian Governments in 1996.  Certification requirements for U.S. poultry exports were
revised, as a result of these discussions.All food products entering Russia now require certificates from both the Russian State
Committee on Standards, Metrology, and Certification (Gosstandart), showing the product
meets all applicable Russian standards; and from the Russian State Committee of Sanitary and
Epidemiological Surveillance (Gossanepidnadzor), showing that the product may be imported. 
In addition, all meat and meat products imported into Russia require veterinary certificates.  The
Russian veterinary requirements were worked out in cooperation with USDA's Food Safety and
Inspection Service for imports of beef, pork, poultry, pork intestines, prepared meat products,
and feed of animal origin.Product labeling requirements have also been changed recently, and Russian-language labeling
using the Cyrillic alphabet is now required by law.  Many manufacturers are using stick-on
Russian/Cyrillic labels.  U.S. firms should work closely with Russian importers of their products
to meet certification and labeling requirements.Meat and meat products are subject to significant import duties.  Red meats and related products
are subject to a duty of 15 percent.  Duty on poultry meat is 30 percent, and a minimum per-unit
tariff is applied to certain meat imports, as well.Current U.S. Meat Exports
Within the larger category of meat exports, edible animal offal (viscera and other by-products)
was the second-largest product grouping  in 1996 after poultry, and pork was third.  Russian meat
processors import frozen pork to make sausage.  In 1995, Russia became the second largest
market for U.S. pork exports after Japan, with sales worth more than $70 million.U.S. pork exports to Russia decreased by 30 percent in 1996, to $48 million, at least partly as a
result of new Russian restrictions on imports of pork.  Frozen pork can only be imported for
further processing--into sausage, for example.  Imports of  fresh and ground pork, as well as
frozen pork for retail sale, are currently prohibited.A protocol that would satisfy Russian testing requirements for fresh pork is now under
negotiation.  USDA estimates that if import barriers were lifted, U.S. producers would sell an
additional $50 million of frozen pork and $8 million of fresh pork to Russia in the first year.  U.S.
poultry producers have been able to overcome Russian non-tariff barriers, and the prospects for
U.S. pork exports are also promising, according to USDA.Russian Producers
The success of U.S. meat products in Russia can partially be accounted for by the current state of
the Russian meat industry.  Meat production has dropped steadily in recent years due to increased
production costs.  USDA reports that Russia's overall livestock population has decreased by
more than 40 percent since 1991, and further declines are expected over the next two-to-three
years.  Total inventories of cattle decreased by 40 percent, hogs by 50 percent, and poultry by 45
percent.  Total meat production dropped  by 45 percent, with decreases of  poultry production of
55 percent, pork of 45 percent, and beef of 35 percent over the same period.As mentioned previously, cities and regions outside of Moscow and St. Petersburg present new
opportunities to U.S. exporters.  While the Moscow and St. Petersburg markets for U.S. meat
products and consumer-ready foods have not been saturated, the Foreign Agriculture Service
(FAS) of the USDA believes that their potential for future growth is limited.   For more
information on the certification of meat products in Russia, visit BISNIS Online at
www.mac.doc.gov/bisnis/isa/9611food.htm, or the FAS home page at www.fas.usda.gov, or
contact Mr. Vyacheslav Mikhailovich Avilov, Head of the Veterinary Division, Russian
Federation Ministry of Agriculture and Food, at 011 7 (095) 207-8761.Joan Morgan covers agribusiness for BISNIS.This report is provided courtesy of the Business Information Service for the Newly
Independent States (BISNIS)