THE CONFERENCE PROCEEDINGS - IFEAT

Producers of flavours and fragrances in Russia can, in their turn, buy ingredients from local traders orimport from European traders, or even directly from producers, though the latter is not usually costeffective for various reasons.Challenges for local F&F producersSome of the major challenges faced by local flavour and fragrance producers include:• Lack of qualified employees - when the industry collapsed, education stopped. We still have acourse for flavourists at Moscow University, but no training is available for perfumers andthere are no books or relevant periodicals in the Russian language.• Another challenge is the bad image in customers’ eyes. Generally, products of Russian originare considered to be of poor quality. Unfortunately, this belief is mostly based on realexperience, but happy exceptions also exist.• The greatest problem is the long lead-time for ingredients. Door to door delivery from Europeto central Russia usually takes 4-8 weeks; for deliveries from China, 2-3 months are normal.Because of this, local traders are important participants in the market.F&F industry challenges (for both local and foreign companies)• Ethanol usage is strictly and expensively regulated, which practically bans its inclusion inflavour and fragrance applications;• Benzaldehyde is also a regulated substance: products containing more than 10% of BA aresubject to licensing;• Regulations on customs procedures and certification of aromatic ingredients are obscure andnot transparent: they prevent new industry players from entering the market. In imports,samples are not generally distinguished from regular commercial cargoes, which makessampling difficult and expensive.• Certification: as food ingredients, flavours must be certified with a CSR (Certificate of StateRegistration). Fragrances, as cosmetic ingredients, are not subject to any obligatoryregistration.Aromatic ingredients fall into a controversial group of materials that can be classified either asfood or as cosmetics ingredients, or even as potentially hazardous ingredients. The legislation isnot transparent. Read negatively, every single chemical should be certified with a CSR (approx.cost of one certificate is !1300), which is not viable commercially, so market players areconstantly looking for ways to avoid this.Advantages for local F&F producers• Relatively cheap labour force leading to lower costs of production;These allow small product runs.• Better understanding of customers’ needs, tastes, formulations; customers’ support in theRussian language;• Short delivery time inside the country;258