The Federation Council in Russia is set to amend the Civil Code to grant equal rights to manufacturers who wish to use product images on their packaging. This will not only create wider opportunities for new brands, but also cause a shift in market trends among Russian consumers.
According to Russian broadsheet Izvestia, Russia’s Federation Council plans to amend the intellectual property protocol by protecting local producers against companies with registered trademarks using similar branding. Currently manufacturers with exclusive trademarks hold the right to refuse market entry to competitors’ products, can demand the withdrawal of goods already produced and seek compensation for any damage done. As an example, the owner of Elizaveta brand registered crispbread as a part of its trademark, and sued its competitors whose products featured similar images of crispbreads on their packaging.”
Changes beneficial for both consumers and brands
Research firm Canadean predicts that the new amendments proposed by Russia’s Federation Council, if acquired, will change the FMCG markets rules in Russia. This will create better conditions for smaller businesses and new entrants. However, the number of companies taking inspiration from each other is set to increase, and more consumers will shift from their original label to a different manufacturer. “This is highly likely to work well for the consumers, as increased competition can lead to a greater array of choice, allowing consumers to choose products that align specifically with their needs,” says Veronika Zhupanova, an analyst at Canadean,
Manufacturers will have to take an innovative approach
To counteract this, manufacturers would need to adjust their marketing strategies and increase the consumer’s connection with the brands. For example, food and drink manufacturers can underline the quality of ingredients and how they will benefit consumers. They could also highlight superior taste and functional benefits to stave off competition. “This will push already established FMCG brands, who have started to get comfortable, into innovating further the formulation and positioning of their products, and encourage them to create new and more engaging advertising campaigns, attracting consumers and strengthening their connection to the brand,” says Zhupanova.