Track & trace for tobacco

In January 2018, a track & trace experiment for tobacco products was launched in Russia. The Center for Research in Perspective Technologies is the operator (Operator — CRPT), and the project is coordinated by the Ministry of Industry and Trade of Russia. Tobacco products are marked in consumer and group packaging, and the shipping package may also be marked. A two-dimensional code in the Data Matrix format, protected by domestic cryptographic technologies, is applied to the pack and the carton.

All major manufacturers of tobacco products, such as Japan Tobacco International, Philip Morris International, Japan Tobacco International, British American Tobacco, Imperial Tobacco, etc., participate in the experiment, as well as retail chains, distributors, and software developers. A total of 75 participants have registered in the system. CRPT collaborates with developers of accounting software, manufacturers of cash register equipment, fiscal data and e-document flow operators in order to improve the efficiency of the system implementation.

At the first stage of the experiment, the cash register software was refined by the companies Dreamkas, Atol, SKB Kontur, and Shtrih-M. Developers of the e-document flow systems (Taxcom, Korus Consulting CIS, and Kontur) refined the software tools that are used to exchange source documents in electronic format.

As early as in February, manufacturers began to apply the digital code on packets: on 12 February 2018, a batch of marked cigarettes was produced at the Philip Morris Izhora factory, on 15 February at the Petro JTI Russia factory, and in late March at the BAT Russia factory. In April, the Center for Research in Perspective Technologies completed the full traceability chain and took the package out of circulation in stores. On 2 April 2018, a sales outlet of the Perekrestok chain of stores registered the removal of tobacco goods from circulation in the information system using the cash register equipment from the first batch of marked products, manufactured at Petro LLC. The removal of tobacco products produced by Philip Morris Izhora JSC from circulation was also registered in the chain of METRO Cash & Carry LLC stores.

In the second stage of the experiment, the number of marked cigarettes will be increased significantly, with importers and minor retailers joining the pilot project.

Representatives of manufacturers
Japan Tobacco International
Philip Morris International
BAT
Imperial Tobacco
KT&G
UTF
Representatives of distributors
Megapolis
SNS
Representatives of wholesale and retail trade
Х5 Retail Group
Magnit
Metro СС
Lenta
Dixy
Bristol
Auchan Retail Russia
Partners
Atol

Focused on developing and selling equipment and software solutions for front office automation for chain and independent (food and non-food) retailers, cafes, restaurants, hotels and service companies.

Dreamkas

Solutions for effective trading. When developing equipment, our engineers rely upon the results of business process studies conducted at various stores.

Shtrih-M

Leading Russian developer and manufacturer of high-tech business automation systems, one of the pioneers in the Russian trade automation industry. Priority business line — the manufacture and implementation of cash register equipment per Federal Law No. 54-FZ.

Weilandt Elektronik

Offers a wide range of services: from repair and maintenance of mobile data collection terminals to leasing out and selling second-hand devices, and installation of special-purpose software for data collection terminals.

Merkata

An online cash register and web service for business management.

RightScan

Supplier of equipment for automatic data identification (Auto ID), printing and bar-coding systems. System integrator and software developer.

Crystal Service

Develops programs for retail trade, creates and implements cash register solutions, supplies shop equipment for top global companies.

FDO Platform

An accredited fiscal data operator.

First FDO

The first fiscal data operator for reliable storage and quick transmission of receipts to the Federal Tax Service as per Federal Law 54-FZ.

Taxcom

Electronic accounting, e-signature key retrieval, sale of 1 °C products, migration to e-document flow, FDO.

SKB Kontur (Production Company)

Develops programs for executives and accountants that facilitate interaction with the government and contracting parties, simplify internal processes, and help to manage day-to-day tasks.

KORUS CIS (Sfera)

IT company, integrator, SaaS provider, developer of digital services and automation services for a wide range of business processes of legal entities.

ECOM (Exite)

International provider of e-document flow services.

Tensor

A company dealing in information technologies.

KalugaAstral

Development and implementation of e-document flow systems that allow to significantly simplify work with reports.

OFD.ru

A fiscal data operator created at a subsidiary of PETER-SERVICE; provides an easy and reliable service for cash register equipment management, data processing and transfer to the Federal Tax Service, and also offers solutions that help businesses to optimise costs, increase revenue and create the best offers for customers.

Viktor Evtukhov
Viktor Evtukhov

State Secretary/Deputy Minister for Industry and Trade

«The results of the first stage have proven the marking method to be the correct choice. From these results, we can be sure that the industry is ready for the mass release of coded products. By the end of the year, it is planned to increase the amount of marked tobacco products 175 times compared to the results of the first stage — and reach up to 100 million packs»

Sergey Golovko
Sergey Golovko

Vice President of JTI on Corporate Relations and Communications in Russia

«It’s been seven months since the experiment qed, and we can already see that Data Matrix is the right choice for tobacco products marking since it facilitates sustainable production and further traceability of products. In addition, it is a cost-effective track & trace digital solution for all market participants compared to existing alternatives».

Aleksandr Mironenko
Aleksandr Mironenko

Director for Communications with EEU and Protection of PMI Trademarks in Russia

«During the first six months of the pilot project, we did not experience any significant technical issues related to retrofitting the plant or to the production process specifics. Taking part in the experiment did not require rebuilding the company’s production lines».

Maxim Kurgansky
Maxim Kurgansky

Head of BAT Russia for Combating Illegal Circulation of Tobacco Products

«During the pilot project, a track & trace system has been developed which has no comparable counterparts across the globe. During the first stage of the experiment, the operators of IT systems, manufacturers and retailers were able to test the marking solutions and find areas for improvement».

Aleksandr Aleksandrov
Aleksandr Aleksandrov

Senior Manager at Imperial Tobacco for Regulation and Interaction with State Authorities

«For us, the importance of conducting the experiment before introducing mandatory marking is apparent to us. The pilot project allows us to uncover problems and bottlenecks as well as determine the objectives that need to be fulfilled during project implementation, as well as plan for the necessary investments in organizational steps».

Elena Aparina
Elena Aparina

Advisor of the Chairman of the Board of Taxcom

«Since the very beginning of the pilot project, fiscal data operator Taxcom developed a special technology for transferring data through universal source documents for all project participants, which has made it possible to submit data on unique codes of packs, cartons and boxes to the CRPT system within the prescribed periods. We support the pilot project for tobacco products marking and believe that building a system of full traceability is a truly important and necessary initiative, for both manufacturers and consumers».

Alexey Grigoryev
Alexey Grigoryev

Head of the Moscow Representative Office of METRO AG

«METRO welcomes the state’s readiness to work out all functional elements of the system for traceability of tobacco products within the scope of the pilot project. For our company, it is important to not only adjust our own processes but also to fully account for the specific needs of METRO’s key clients — representatives of small and medium-sized businesses in the retail and hospitality sectors».

Timofey Moshkov
Timofey Moshkov

Head of the Logistics and Planning Office of MEGAPOLIS Trading Company

«The traceability scheme for tracking tobacco products is based on the concept of e-document flow, which MEGAPOLIS Trading Company uses in its operations. During the experiment, we hope to refine the interaction system within the e-document flow, not only with retail chains, but also with other participants of the tobacco market».

Stanislav Naumov
Stanislav Naumov

Director for Interaction with Authorities at X5 Retail Group

«We see great potential in the tested track & trace system for bona fide participants of the consumer market in the fight against illegal tobacco product circulation across the country. We therefore actively take part in the experiment».

Vladlen Maksimov

Head of the League of Freedom trade union

«In my opinion, the option to use digital marking for tobacco goods is the soundest one for businesses out of all those proposed (tags, etc.). I see no significant reasons for an increase in the price of goods».
Source: Tass.ru

How to take part in the experiment


To take part in the track & trace experiment for tobacco goods, the following is necessary:

  • Submit an application to participate
  • Receive an enhanced, encrypted and certified e-signature at an accredited certification centre (see the list of centres on the website)
  • Register as an experiment participant in the track & trace system at https://ismotp.crptech.ru.
  • Requirements for participants

To utilise the system, the following technical equipment is required:


For manufacturers:
  • Equipment and software for serialization and aggregation
  • Recorders of the emission of marking codes (provided to operators of the project by the Center for Research in Perspective Technologies free of charge)
  • Connection to the e-document flow operator (if EDF was not previously used)

For distributors and wholesalers:
  • Connection to the legally relevant e-document flow system

For a retail point of sale:
  • Connection to the legally relevant e-document flow system
  • A 2D scanner (unless purchased before) and software update for the already installed online cash register
Regulations
Загрузить
Guidelines for conducting an experiment for marking tobacco products by means of identification tools and monitoring of tobacco products circulation within the territory of the Russian Federation
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Загрузить
Resolution of the Government of the Russian Federation of 27 November 2017 No. 1433 On the experiment on the marking of tobacco products with identification tools and monitoring of tobacco products circulation (together with the Regulation on the experiment on the marking of tobacco products with identification tools and monitoring of tobacco products circulation)
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About the experiment
  • What is IS MOPT?

    IS MOPT is the information system for the marking and monitoring of tobacco products circulation.

  • What is marking? Why is it being introduced in Russia?

    The problem of illegal product circulation is particularly acute for Russia: the share of illegal circulation in light manufacturing is about 35%, in the perfume market — 20%, and in the medicine market — up to 10%.

    According to research by Kantar TNS analytical agency, the share of the illegal cigarette market in Russia increased to 7.7% in Q1 2018, as compared to 4.6% the previous year.

    In December 2017, Russian President Vladimir Putin approved the resolution of the Government for the creation of a national system for digital marking of goods by 2024 based at the Center for Research in Perspective Technologies (CRPT).
    CRPT is a joint project of USM Holdings (Peterservice, 50%), Rostec State Corporation (Avtomatika Concern, 25%) and Elvis-Plus Group (25%).

    The system being created by the Centre, known as Chestny ZNAK, makes it possible to effectively combat counterfeit and contraband goods and protects legal businesses and brands of bona fide manufacturers and consumers.
    Digital marking will allow businesses to increase their production capacity, improve logistic schemes, increase market share and ultimately increase revenue:

    • By reducing the share of contraband and counterfeit goods, legal manufacturers will increase the share and volume of production by 5–50%, depending on the product group
    • Businesses can switch their production to Industry 4.0, working based on the Just-in-Time principle. By receiving data on products online, they will be able to plan production to the optimal level, reduce stock surplus, and increase turnover of goods
    • Businesses will be able to save significantly on logistics: during the implementation of full traceability, the manufacturer or logistics company can receive the latest statistics on sales geography, performance and seasonality, which will make it possible to modify logistics systems and optimize shipments and inventory
    • Businesses will adjust their accounting processes. These days, many entrepreneurs do not have their own data on balances and goods codes in warehouse and stores. Without the correct accounting, it is impossible to calculate profits and plan purchases; therefore, automation would help entrepreneurs to get their business in order
    • Businesses will switch to the e-document flow. EDF will radically reduce the volume of paper documents that are still actively exchanged by Russian companies and cut business costs, as well as improve labor productivity

  • Who made the decision to introduce the track & trace tobacco experiment in Russia, and when? Which state authorities will oversee this system?

    In accordance with Resolution No.1433 of the Government of the Russian Federation dated 27 November 2017, «On Conducting a Track & trace Experiment for Tobacco Products using Identification Tools and Monitoring the Circulation of Tobacco Products», an ongoing experiment was launched on 15 January 2018 within the Russian Federation, and is coordinated by the Ministry of Industry and Trade of Russia.

    As of March 2019, the digital marking will be mandatory for the tobacco industry. Amendments were made to Federal Law FZ-15 that approve the deadline of 1 March 2019 as the start of the mandatory marking and were signed by Russian President Vladimir Putin on 30 July 2018. It had previously been supposed that the marking would be implemented as early as 1 July 2018.

  • What is the pilot project, and why is it necessary?

    Before the transition to the mandatory marking, pilot projects are conducted for each group of goods. They are necessary for representatives of the industry to be able to prepare for working with marked products in a calm manner, together with the project’s operator. This includes adapting equipment for printing codes, upgrading cash register software, etc.

    These pilot projects must commence at least a year before the mandatory marking begins, allowing the relevant industry to prepare for implementation and minimize costs.

  • What are the project dates?

    The project began on 15 January 2018 and will run until 31 December 2018. It is divided into two stages. At the first stage, major manufacturers, distributors and retail chains participate in the pilot project; at the second stage, they are joined by importers and traditional retailers.

  • Will any payment be collected from participants of the pilot project to generate the codes? What is IS MOPT?

    At the pilot project stage, all participants will gain access to the system, including the generation of digital marking codes and traceability of their circulation, free of charge.

  • Who participates in the pilot project; who can join and how?

    The experiment participants are tobacco companies in Russia, which manufacture about 95% of all tobacco products in the country, (Japan Tobacco International, Philip Morris International, British American Tobacco, Imperial Tobacco, Donskoy Tabak, Korea Tomorrow & Global Corporation, Union Tobacco Factory), the distributors through which over 88% of tobacco products are sold (Megapolis Trading Company, SNS Group), and retail organisations (X5 Retail Group, Metro C&C, Lenta, Magnit, Dixy, etc).

    To become a participant of the pilot project, submit an application at https://честныйзнак.рф/

  • How will operations be affected for each market player after they switch to working with marked tobacco packs?

    Changes for market players will be minimal.

    Manufacturers need to adjust the process of applying a Data Matrix digital code on packs and a linear code on cartons. The digital code applied to each product item will be scanned by members of the sales chain. Information on their movements will be transferred to the Chestny ZNAK system.

    Distributors will deliver the data to the track & trace system in electronic format via e-document flow operators, by using a Universal Transfer Document (UTD) comprising a waybill and an invoice. This document has been developed by the Federal Tax Service of Russia and is recommended for use. Those who are not yet using the EDF system must begin to do so.

    When the goods are sold, after arriving at the retail sales points, information on the sale must be submitted to the Chestny ZNAK track & trace system. For this purpose, the code on the pack needs to be scanned at the cash register, and it will be automatically transmitted to Chestny ZNAK through the fiscal data operator to whom the cash till is connected. Since the code contains the product GTIN, it is enough to just scan the Data Matrix itself. As the system already contains data on the maximum retail price, the cashier would not need to input this information at the point of sale.

    As of 1 July 2019, all points of sale will be equipped with online cash register in accordance with the requirements of Federal Law 54-FZ, and it will not be necessary to install additional software and hardware such as the Unified State Automated Information System. Costs on the adaptation of the marking processes will be minimal for retailers.

  • Necessary resources and equipment for implementation of the track & trace system for tobacco products:

    • To utilize the system, the following technical equipment is required:

      For manufacturers:

      • Equipment and software for serialization and aggregation (unless previously purchased)
      • Recorders of the emission of marking codes (provided to operators of the project by the Center for Research in Perspective Technologies free of charge)
      • Connection to the e-document flow operator (if EDF was not previously used)

      For distributors and wholesalers:

      • Connection to an e-document flow operator (EDF) and a digital signature (unless issued earlier)

      For a retail point of sale:

    • A 2D scanner (unless purchased before) and software update for the already installed online cash register
  • The necessary costs to implement marking and traceability for different groups of market participants are non-recurrent and fixed:

    For manufacturers:

    • If the necessary equipment and software are not available, manufacturers will have to invest a lump sum of 6 to 15 million rubles in order to purchase the production line and adapt it depending on the selected ERP system
    • The emission recorder is provided by CRPT free of charge
    • For bulk sales, it is necessary to use EDF to send source documents the average market tariff for processing one document in EDF is RUB 5.4. Average annual expenses on EDF services will be about RUB 21 mln for major manufacturers and RUB 0.7 mln for minor ones

    For distributors and wholesalers:

    • Depending on the scale of the distributor’s or wholesaler’s business, the annual EDF expenses may vary (the approximate estimate, depending on the average market tariff for processing one document in EDF is RUB 5.4):
    • The EDF expenses for wholesalers with a turnover of 50 mln packs per year will be about RUB 270,000 per year
    • The EDF expenses for distributors with a turnover of 9 bln packs per year will be about RUB 49 mln per year
    • The EDF expenses for wholesalers with a turnover of 3 bln packs per year will be about RUB 15 mln per year
    • The EDF expenses for wholesalers with a turnover of 1 bln packs per year will be about RUB 5 mln per year
    • The incoming traffic of electronic documents is not charged

    For retail points of sale:

    • If the seller does not have a 2D scanner, a lump-sum investment of RUB 4,000 will be needed to purchase one.
    • For small-scale retailers, it may be necessary to install the updated cash register software to work with the marked products. Cash register software support — RUB 7,500/year. This information can be specified at service centers of cash register equipment vendors.

    It is worth mentioning that the costs spent on EDF are recovered as a result of reduced turnover of paper documents and, consequently, savings on printing, sending and storing paper documents. The average cost of a paper document is RUB 20, which is 4 times higher than the cost of an electronic document.

  • I am a software developer, and I have a proposal for the experiment operator. Whom should I contact?

    We invite solution developers and integrators to participate in the project and wish to make our system as open, convenient and useful for the market as possible. Send your proposals to motp@crpt.ru

  • Contacts of  suppliers of technical solutions

    Dreamkas https://dreamkas.ru

    CSI https://www.crystals.ru

    ATOL https://www.atol.ru

    SKB Kontur production company https://kontur.ru

    Shtrih-M https://www.shtrih-m.ru

    Taxcom https://taxcom.ru

    Korus Consulting CIS https://www.esphere.ru

    MoySklad https://www.moysklad.ru

    Tensor https://tensor.ru

    First FDO https://www.1-ofd.ru

    Trekmark https://www.trekmark.ru

  • Hotline for contacting market players with questions about the project.

    +7 (499) 350-8559, +7 (499) 350-8596

    E-mail: motp@crpt.ru

0day
0hour
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before the launch of mandatory marking on 1 March 2019
The experiment has been conducted since 15 January 2018
1861

Participants of the experiment

189 230 168

Marked packages

Become a participant
Experiment completion date: 02/28/2019
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