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 will cause a shift in market trends among Russian consumers, according to research firm Canadean.
The Council plans to amend the intellectual property protocol by protecting local producers against companies with registered trademarks using similar branding. Currently manufacturers with exclusive trademark hold the right to refuse market entry to competitors' products, demand the withdrawal of already produced goods and seek compensation for any damage done.
Canadean says that the new amendments proposed by the 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 the original label to a different manufacturer. According to Veronika Zhupanova, analyst at Canadean, “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.”
To counteract this, manufacturers would need to adjust their marketing strategies and increase consumer connection with the brands. “This will push aside already established FMCG brands, who have started to get comfortable in innovating further the formulation and positioning of their products, and create new and more engaging advertising campaigns, attracting consumers and strengthening their connection to the brand,” says Zhupanova.
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