Russia represents the largest market in the region, accounting for 70% of value, according to the report by PMR Research, a market research firm specialising in Central and Eastern Europe. But of the three CIS countries analysed – Russia, Ukraine and Kazakhstan - Kazakhstan is set to show the greatest market growth with a forecast compound annual growth rate of 16% between 2014 and 2018.
PMR’s head pharmaceutical market analyst, Monika Stefanczyk, told NutraIngredients these markets had more freedom than their EU counterparts, with any existing regulation “not strictly obeyed”.
Economic and political (in)stability
Discussing Kazakhstan’s forecast growth, Stefanczyk said: “There are several reasons for the fact that growth is faster than that of other countries. These include the most stable economic and political situation among countries analysed.”
Tensions have run high between Ukraine and Russia in recent months as Ukraine has deliberated whether to join the EU and benefit from its free trade zone agreement or to favour stronger ties with its neighbour Russia.
Thousands of protestors took to the streets of Kiev last month after Ukraine’s president, Viktor Yanukovych, announced the country would abandon its EU plans. 98 people died in the violent clashes between protestors, police and military that ensued and many more were injured.
Since then the two countries, the EU and the US have been tangled in an eco-political wrangling of upped trade promises, troop deployment and threats of international sanctions.
Key role for local players
She said within these CIS markets – a loose association of former Soviet Republic states formed after the breakup of the Soviet Union – local players have an important role.
“Evalar, a Russian company specialising in dietary supplements, holds the leading positions in all three of the countries analysed (taking typical supplements only into account). Generally speaking local players play a much more important role on those markets in comparison to the drugs market, except for Kazakhstan where there are not many local players but players from CIS region play important role,” she said.
Regulation “not strictly obeyed”
Stefanczyk said that these markets would of course have more freedom than EU markets regarding marketing and sales dietary supplements, the later introducing tight health claim regulation back in 2006 to govern the marketing of foods and dietary supplements.
She said regulation in these markets did exist, for example a ban on the presentation of dietary supplements as drug, however she said “it is not strictly obeyed”.
“In fact this is a common practice to present dietary supplements as having healing properties,” she said.