Moscow meat producers supply 72 percent of сity meat demand

Moscow meat producers supply 72 percent of сity meat demand
Five of Moscow’s largest meat-packing plants supply 72 percent of the city’s demand for meat products.

Meat production in Moscow has grown 2.6 percent in the last five years. In 2015, Moscow meat producers accounted for 11 percent of all meat sales nationwide, while meat processing was the second largest activity that year.

The five largest meat-packing plants supply 72 percent of Moscow’s demand for meat, and have 12 percent of the national market. The city’s plants are a half to two times more labour productive than the national average.

Subsidies and support

Moscow support measures are an important contributing factor. One example is industrial complex status, which grants a number of benefits, including a fivefold reduction of land tax, a twofold cut on property tax and a 13.5 percent reduction on regional profit tax.

According to Oleg Bocharov, the head of the Moscow Department of Science, Industrial Policy and Entrepreneurship, 18 plants, including three meat processing plants, have obtained this status.

“It is important for the city to see strategically significant plants, such as meat-processing plants, continue to develop and create well-paying jobs. This is what city support measures aim to achieve,” Bocharov said.

Meat producers believe that export potential is the main driver that can move the industry forward, as meat production in the city will continue to grow, according to forecasts.

Twelve industrial complexes

Twelve plants have obtained industrial complex status, and the related tax breaks. These allow the companies to use capital for reinvestment, and production updates and development. According to the Moscow Department of Economic Policy and Development, the overall sum of the tax deductions for the 12 complexes in 2016 is estimated at 436 million roubles.

The tax incentives include profit, land, property and land lease taxes. The overall decrease on a given fiscal liability is 17 to 25 percent.

The following plants have industrial complex status:

Konditersky Kontsern Babayevsky;

Khlebozavod No 24;

Moskovskaya Konditerskaya Fabrika Krasny Oktyabr;

Rot Front Factory;

Wimm Bill Dann;

Moskovsky Melnichny Kombinat No 3;

Tsaritsyno;

Khlebozavod No 28;

Cherkizovo Meat Processing Plant;

Dymosvksoye Kolbasnoye Proizvodstvo;

Konditerskaya Fabrika Udarnitsa;

KBK Cheryomushki;

Two more plants, OZBI and Eastbalt Rus, have applied for additional support for their industrial complexes.

A total of 18 plants, including 12 food producers and three meat processing plants, have attained this status.

Tax deductions for food producers are part of the Moscow Government programme for support and development of the real economy sector.

Who can get the benefits

Many Moscow plants, both old and new, can apply for industrial complex status, provided they meet certain criteria. For example, they are required to have, over five years, invested at least 100 million roubles, before VAT, in production development for each hectare of floor area, and be earning at least 300 million in profits before VAT for each hectare.

Staff salaries are also considered. Workers are to be paid no less than 51,000 roubles a month over the past year. The entire wage budget is to have at least 100 million roubles for each hectare of floor area.

The official website of the Department of Science, Industrial Policy and Entrepreneurship contains additional information on industrial complex status. Applications can be submitted via Moscow’s investment portal.