Russia's Shelf Space Debate: How New Legislation Will Impact the Industry
An analysis of the proposed legislation on Russian shelf space requirements for stores and marketplaces: product display mandates, price increase risks, industry expert opinions, and necessary amendments to the law.
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The draft law on the "Russian shelf" requires retailers to allocate a minimum share of domestic goods on shelves and online, but has sparked controversy due to unclear criteria and risks of rising costs. Experts point to the absence of a methodology for determining what constitutes a "Russian product," the threat of price increases, and complications for marketplaces. The industry is divided: some see the law as protection against the return of Western brands, while others view it as excessive regulation given already existing voluntary initiatives.
What the bill proposes
The debate over the "shelf" has been ongoing since 2023. Initially it focused on household chemicals and cosmetics, but the latest version covers all non-food categories. The Ministry of Industry and Trade supports the project, though the Federal Antimonopoly Service and the Ministry of Economic Development have previously pointed to risks of price increases and restrictions on competition. Industry associations sent a letter opposing the bill, insisting that it discriminates against localized foreign brands. Moreover, most retailers and marketplaces have already implemented a "Russian shelf" format.
The current draft establishes specific requirements:
stores must allocate a minimum share of shelf space to "national goods," specifically at heights between 80 and 160 cm;
products and price tags must be labeled;
online platforms must give priority to national products;
a registry of "national goods" will be created and a "Flagship of Russian Trade" designation introduced;
exceptions are provided for mono-brand chains, duty free shops, and companies with revenues under 2 billion rubles;
licensed goods with contracts of five years or more qualify as "Russian" if the brand name is in Cyrillic.
These provisions expand domestic producers' access to consumers, but simultaneously leave loopholes for former international brands that have changed owners and packaging. But the main question that remains unanswered is: what will regulators actually define as a "Russian product"?
Bottlenecks in Russia's Retail Shelf Space
Experts and the industry are now identifying a significant number of weak points, each of which could become an obstacle to implementing the initiative.
Verification of control. The law requires that goods be produced by companies not under the control of foreign entities. However, Russian law lacks a simple and unambiguous methodology for verifying such criteria. For example, if a manufacturer has a loan from a foreign bank secured by shares, or a minority investor with a foreign passport, how will this be interpreted? Regional chains, where legal departments aren't very large, risk finding themselves in a situation where they physically cannot verify a brand's origin or ownership structure. This threatens either mass formal rejections of suppliers or disputes with regulators.
Quota methodology. The draft law mentions a "minimum share" of national goods but doesn't specify exactly how it will be calculated. This could be percentages of shelf space length, number of SKUs, or turnover. The chosen methodology will determine both the costs for chains and manufacturers' chances of getting shelf space. The lack of clarity creates room for conflicts, as well as potential abuse by regulatory authorities.
Costs. To comply with the regulations, retailers will have to change planograms, upgrade IT systems to track the share of "national goods," train personnel, and conduct regular internal audits. Each of these actions requires investment. Chains warn that even if the government introduces a transition period, costs will run into billions of rubles. Given retail's low margins, this money will most likely be built into the final product price.
Online risk. For marketplaces, the law is even more complicated. Priority placement of "Russian goods" could distort the usual ranking algorithms based on demand, ratings, and delivery speed. As a result, users may see on the first pages not the most popular and attractive offers, but those that formally meet "national" criteria. This threatens to reduce conversion rates and erode customer trust in the platforms. Some experts point out that the idea of a "shelf" is simply inapplicable online.
Industry opinion: How appropriate is the law if "shelves" already exist in both retail and on marketplaces?
The press service of Wildberries & Russ told Argument in response to an inquiry that the company shares the regulator's position on the need to support Russian manufacturers—and is already providing that support. Last year, Wildberries launched a "Made in Russia" section (which now features local brands from 60 regions). Demand for domestic brand products and their share of sales on Wildberries is growing in virtually all categories. In clothing, footwear, underwear, cosmetics, toys, and jewelry, domestic brands, including those with production in Russia, account for more than half of all orders on the marketplace.
The editors of the Telegram channel "TOP riteil" believe the regulation is needed to standardize the rules. "Right now, the 'Russian shelf' is implemented differently across various marketplaces and retailers. In some places, it's products hand-picked by enthusiastic merchandisers; in others, it's based on formal criteria (the legal entity of the manufacturer). Legislative codification creates uniform, transparent, and mandatory rules of the game for everyone," the channel's editors note in conversation with Argument. According to them, a unified mark "will increase trust and strengthen the image of domestic brands."
Marketer and author of the Telegram channel "Riteil" Yulia Dzhanibekova sees a risk of excessive regulation here, which will lead to unnecessary costs without sales growth. "Major retailers (for example, X5 Group, Magnit) and marketplaces (Wildberries, Ozon, Yandex Market) are already voluntarily implementing similar formats (special sections or priority placement of Russian goods in search results). Mandatory quotas risk becoming excessive regulation, which could lead to additional administrative burdens without significant sales increases," the marketer explains.
Managing partner of RETAILITY Dmitry Tokarev is convinced that government interference in merchandising is pointless when Russia has a weak production base. "If manufacturers lack capacity, no shelf space will save them. It's better to provide tax breaks and cheap loans—then business will regulate itself through competition," Tokarev believes.
A different position was expressed by the founder of the Retail Academy, MGIMO Associate Professor Alexey Filatov, who is certain that now is the right moment for the law. "Today, members of the Retail Academy assess the probability of Western A-brands (major ones) returning to our market as high. With the return of Western competitors, our companies will fold under pressure. Guaranteed access to customers through quotas will become an important component of business sustainability," Filatov explains.
Industry opinion: what risks does the "Russian shelf" law pose for the sector?
TOP retail warns that the key threat is rising transaction costs. "Manufacturers will have to gather documents to confirm localization, while retailers will need to overhaul IT systems and auditing. These expenses will very likely be built into the final product price," the Editorial team notes in conversation with Argument. They don't rule out "conflicts and legal disputes over what qualifies as a 'Russian product.'"
Yulia Dzhanibekova ("Retail") adds that the risks extend beyond pricing. "There's a threat of reduced assortment and monopolization in narrow categories where domestic goods can't compete on quality or variety—particularly relevant for regional chains. And discrimination against localized foreign companies (for example, companies manufacturing goods in Russia but under foreign brands) could trigger international disputes," the marketing expert emphasizes.
Alexey Filatov, founder of the Retail Academy and associate professor at MGIMO, sees it differently—restricting foreign goods will push Western brands to invest in localization and intensify competition. "Against this backdrop, I don't see potential for rising costs and retail prices," he believes.
Industry opinion: what revisions does the current version of the bill need?
Nearly everyone agrees here. TOP-retail emphasizes that without precise criteria and methodologies, the law won't work. Localization requirements by category and control mechanisms need to be clearly defined.
Yulia Dzhanibekova insists on flexibility. According to her, universal quotas for all categories are a mistake. Electronics and clothing should have different criteria. "Revisions to the law must account not only for industry specifics but also for small business interests, to avoid their displacement by major players," the marketing expert concluded. Dmitry Tokarev, managing partner at RETAILITY , also called for differentiation by sector.
Alexey Filatov, meanwhile, believes the most important thing is clarifying the list of specific brands and products that will receive preferences. According to him, space on the "Russian shelf" should go to those who are actually in demand among shoppers.
Balancing Interests
The "Russian shelf" bill has become an arena for clashing positions. For the state, it's a tool to support industry; for retail, a potential source of costs and risks; for consumers, either possible price increases or, conversely, a new opportunity for domestic brands.
The main intrigue lies ahead: will the Ministry of Industry and Trade manage to address the industry's concerns and turn the idea into a working mechanism? By March 2026, the market will find out whether the "Russian shelf" becomes a stimulus for trade development and import substitution.
