In Russian society, there's a debate about a proposed law to block websites selling unregistered dietary supplements without a trial. The law is supported by State Duma Vice Speaker Sergei Neverov and deputy Alexander Petrov, and it's gaining attention.
People involved in the market sent a request to Prime Minister Mikhail Mishustin asking to consult industry representatives before making changes to the current legislation.
Another federal parliamentarian, Alexander Prokopiev, who is connected to the largest domestic dietary supplements manufacturer, Evalar, is said to support the new law. The owners of Evalar have pressured the American iHerb marketplace, and people connected to Evalar were involved in legal actions against iHerb.
The official owner of Evalar is Larisa Prokopyeva, the mother of the deputy, who is on Forbes' list of the richest women in Russia. Evalar is considered a major supporter of United Russia in the Altai Territory, which explains why high-ranking members of the party are supporting the bill. However, Evalar has been involved in scandals and lawsuits, including attempts to pass off dietary supplements as medicines.
The deputies are focused on dietary supplements
A discussion has intensified in Russia about a law to block websites selling unregistered dietary supplements (BAA) without a trial. The law was introduced last June by the vice-speaker of the lower house, Sergei Neverov, and a member of the United Russia Health Committee, Alexander Petrov.
The explanatory note to the bill states that the number of complaints from citizens concerned about false information about dietary supplements on the Internet is increasing every year, including complaints about online stores selling dietary supplements containing prescription drugs.
People's representatives point out that it's difficult to identify the owners of websites and individuals selling unregistered supplements online, making it challenging to apply the legal process. So, they proposed a radical solution – to block these resources without a court decision.
Some members of the deputy corps have mixed feelings about the proposed law. The head of the Duma Committee on Information Policy, Information Technology and Communications, Alexander Khinshtein, described it as “excessive” and “not consistent with the current legislation.” According to the committee, blocking access to sites is considered “an extreme measure used in the fight against serious violations of Russian laws.”
Meanwhile, opponents of legal changes did not deny unfair advertising, where dietary supplements are portrayed as a miracle cure for all illnesses. In contrast, supporters of the stricter rules cited a case from the beginning of 2021, where a website was found to be distributing prohibited information offering unregistered supplements containing dangerous substances.
Is “Evalar” getting rid of its competitors?
Since January, the debate has resumed with renewed intensity. According to Kommersant, industry participants, through the Association of Internet Trade Companies (AKIT) and the Russian Association of Electronic Communications (RAEC), sent a request to Prime Minister Mikhail Mishustin, urging consultation with industry representatives before adopting legislative changes. Their main argument is that the amendments equate selling unapproved goods online to promoting suicide methods and drug production, which could lead to widespread closure of online trading companies with a turnover of 3.6 trillion rubles in 2021 alone.
The proponents of the initiative responded last week. Sergei Neverov mentioned that the new version of the document includes specific cases when products are deemed prohibited for circulation. He emphasized that the bill does not aim to completely shut down online stores for violating the designated norms, proposing a page-by-page mechanism. However, the deputy noted that the bill does not suit large venues, adding that selling what is prohibited in other countries is well-implemented in their market.
In light of this activity, one can't help but wonder if the deputies' motivation to clean up the internet space from unscrupulous manufacturers and distributors of uncertified products is solely for the nation's well-being. As expected, an alternative perspective is also presented.
“The bill stemmed from competition between Russian companies producing dietary supplements and foreign sites, which, due to the specifics of Russian and supranational legislation, benefit from better tax conditions … It is in this conflict of interest that I see the emergence of online commerce that is harmful for the entire market and our society in general, creating a precedent for extrajudicial blocking of goods not restricted in circulation,” said Artem Sokolov, president of AKIT, in an interview with Lenta.Ru.
An important participant in the discussion was also named – the largest Russian manufacturer of dietary supplements, Evalar company. Additionally, referring to interviews with market participants, Kommersant describes the bill as “part of the ongoing battle between Evalar company and the American iHerb marketplace.” In January, the media reported that the iHerb online store was added to the register of banned sites by Roskomnadzor, based on a decision from the Central District Court of Barnaul on August 24, 2021, in response to a claim from the prosecutor’s office following an appeal from the Altai regional public organization of consumers “People’s Control”.
The mother of a deputy is involved in a business.
The pressure on iHerb is connected to Evalar. The company's headquarters is in Barnaul, where a court decision was made to block the site. According to the information from the portal “Taiga. Info”, Nikolay Yakushev, a leader of the People’s Control prosecutor’s office, who filed a complaint, is also connected to Evalar.
Evalar is also associated with the executive director of the Union of Producers of Dietary Supplements for Food, Alexander Zhestkov, who was involved in proceedings in the Ulyanovsk court. Zhestkov, who wrote an appeal to the prosecutor’s office, served as an assistant to State Duma deputy Alexander Prokopyev, who is the son of the owner of Evalar, Larisa Prokopyeva.
The deputy is involved in lobbying activities, using connections with colleagues in United Russia to promote family commercial interests. Prokopiev cannot initiate necessary bills himself, so other deputies are doing it for him.
Evalar CJSC has impressive financial performance, with a revenue of 10.7 billion rubles and a profit of 4.5 billion rubles in 2020. The owner of the company, Larisa Prokopyeva, was among the 25 richest women in Russia according to Forbes. The company has been named as one of the main sponsors of “United Russia” in the Altai Territory.
The company is regularly among the largest Russian advertisers. The “Alexander Prokopiev Foundation” is the main customer of positive publications in the press, but the deputy recently withdrew from its founders. Prokopiev prefers to distance himself from commerce, and his share in Farmavest LLC has been transferred to trust management. The sister of the parliamentarian Natalya Prokopyeva, who heads the Board of Directors, is also involved in managing Evalar.
Advertising fraud and a bet abroad
But, despite advertising and creating the most positive image, the largest Russian manufacturer of dietary supplements has repeatedly found itself at the center of high-profile scandals. So, in 2013, employees of the Kurgan regional Rospotrebnadzor recorded the content of arsenic in a batch of the drug Blueberry-forte with lutein produced by Evalar. And then the administration of the native Altai Territory came to the aid of the enterprise, where during the meeting it was decided to conduct their own examination on the basis of the regional “Center for Hygiene and Epidemiology”. Of course, the new study did not reveal any signs of a dangerous substance.
The company was also accused of violating advertising laws. For example, back in 2011, by a court decision, Evalar was fined 100 thousand rubles for advertising the bioadditive Glycine Forte Evalar, which was presented as a drug, in fact, not being such. Moreover, manufacturers convinced the consumer that the dietary supplement is more effective than the well-known medical preparation Glycine. A year later, history repeated itself: this time, the medicinal properties were attributed to dietary supplements “AD minus” and “Inulin forte Evalar”.
And such cases are far from isolated. In 2016, the company had to pay a 100,000th fine for an untrue advertisement for Laura peptide cosmetics. In the same year, the Federal Antimonopoly Service recognized the advertising of the drug “CI-KLIM” as unreliable, supposedly slowing down the aging process, which did not correspond to the instructions for its use. In 2019, the antimonopoly department imposed an administrative fine on Evalar in the amount of 200 thousand rubles for contextual advertising of the drug Ginkoum.
It turns out that the nimble Prokopiev family is intensively selling fuflomycin of its own production under the guise of medicines, while not sparing money on advertising. This does not always work, but what is a fine of 100-200 thousand rubles for an enterprise with billions in turnover? It is significant that in recent years Evalar prefers to register its products not in Russia, but in Armenia and Kazakhstan. In the latter, the dietary supplement Red Root, produced by a Russian company, was for some time in the Register of Non-Conforming Products due to the content of a synthetic inhibitor, tadalafil, in it (for the same reason, dietary supplements for potency Ali Caps and Sealex forte”).
