According to Foreign Intelligence Service of Ukraine
Against the backdrop of rising prices in Russia, the population is reducing demand for dairy products and seeking more affordable options. The information is confirmed by the Foreign Intelligence Service of Ukraine, with the report transmitted by Ukrinform.
“During the first seven months of 2025, butter prices rose by 34% year-on-year, sour cream and milk by 22%, and cheeses by 19%. The price of raw milk used to produce finished products rose by 23.1%”
Trends in Dairy Product Sales in Russia
From September 2024 to August this year, the overall volume of dairy product sales in Russian stores fell by 2.8%. In May, analysts expected a decline of only 1.2%.
The largest drop was recorded in butter and margarine sales – by 11.2%, ultra-pasteurized milk – by 11.1%. Demand for ryazhenka, prostokvashka, and processed cheese has declined by about 7.1%. Consumers are increasingly turning to plant-based substitutes.
Despite declines in physical volumes, revenue rose – from 6.7% to 24.6% depending on the category. The Foreign Intelligence Service explains this development as a sign of inflationary pressure.
Manufacturers and retail networks warn of possible further price increases if amendments to the Russian Tax Code are adopted, which provide for a new government duty for entering data into the labeling system. Currently, Russian companies pay 60 kopecks per VAT code, which creates significant costs for the food industry – about 52 billion rubles per year.
Businesses are also spending on the services of electronic document management operators, whose fees are not regulated by law. The new rule on collecting a duty at each transfer of ownership creates a risk of double payments for the same product.
The average profitability of the dairy sector in Russia does not exceed 6%. Costs for labeling codes already exceed 15 billion rubles per year, while net profit is around 90 billion.
“New charges will inevitably lead to further price increases and reduced accessibility of dairy products for the population”
According to intelligence, businesses in Russia are currently facing a shortage of funds to pay salaries and taxes.
