Zaur Balagov, the President of Diamond Holding on the social responsibility of business

It is well known that the quality of food consumed by Russians causes a lot of complaints. Who is responsible for this - the state, the business? How should the problem be solved? Those and other questions were answered by the president of Diamond Holding, Zaur Balagov, exclusively for the magazine "Russia Today".

RFS: Mr. Balagov, there are a lot of good words about the social responsibility of business, a civilized interaction between the authority and an individual entrepreneur. What is “social responsibility" for you and your company?

Zaur Balagov:  Social responsibility in business is seriously talked about after the head of state, Vladimir Putin, in his Message to the Federal Assembly of the Russian Federation in 2006 drew special attention to it. If business is aimed at sustainable and long-term development, to increase investment attractiveness and improve the reputation of the company, with a mutually beneficial partnership with the government and society, social responsibility is a mandatory attribute of a modern business. The main criteria of social responsibility for Russians are the timely payment of wages, production of quality goods and performance of business obligations to clients and partners according to VCIOM polls. And you know, I can say with confidence that our company meets fully the expectations of society.

We formulated the social responsibility of our company in a particular way a long time ago: it is providing the citizens of Russia with quality food.  

RAF: From what you have said, one of the actual issues of the day follows – food supply security of country. Who has to play the first role – the government or business?

Zaur Balagov: Russian consumers have become more demanding in today's competitive world. In this situation, a self-respecting and thinking company is not interested in supplying the market with defective products. Despite this, Russians have a lot of questions about food quality.

The state is, of course, obliged to work out primarily certain rules of the game, and business, ideally, should follow them. The state should strictly control food quality; act as a guarantor for meeting sanitary norms and rules. The state performs the main regulatory functions in a civilized market. But the Russian practice, unfortunately, is sometimes seriously disrupted. There are a lot of reasons for it. The main problem is an unprincipled position of some officials of supervising bodies. As a result, products of poor quality are thrown onto the market. Sometimes the state is not in a hurry to respond to business challenges. For instance, the Union of alcoholic beverage producers sent to President Vladimir Putin a letter calling to freeze excise duty at 400 rubles level per liter of absolute alcohol until 2017. The fact is that the retail price of alcohol is closer to the European average, and income levels remain unchanged. The increase in excise duty by 33 per cent on January will lead to an increase in illegal alcohol. The share of counterfeit vodka in the country has reached 40-50 percent, according to the view of many experts. The state wins from it, isn’t it?

RFS: What makes manufacturers of domestic products go to the"left"?

Zaur Balagov: First of all, it is maximizing profits! To organize a legitimate business in our country is sometimes much harder than an illegal one. The reasons for such an abnormal situation are well known to everybody. Yes, the company must be responsible ultimately for its activities, but the state must protect such a company. And why legislators do not take more stringent measures on those who are associated with counterfeiting, I do not understand. If I had my way, I would introduce definitely a criminal liability for illegal profit through production and realization of illegal products.

RFS: Mr. Balagov, as far as I know, you are actively supporting local farmers to distribute products recycling industry.

Zaur Balagov: When I go to the shops to buy products, I am surprised and sometimes outraged that there are few Russian products on the shelves, the more I'm not a stranger to the potential of our agriculture. I decided to hold a review of this market, and asked the analyst. After analyzing the situation with experts in the industry, we have come to the conclusion that conservation is a really promising market. Besides, encouraging domestic farmers is a noble goal.

We created our own brand SPELO-ZRELO travelled around the country in search of the highest quality and reliable producers and began to invest a significant portion of our profits from the alcohol business in this interesting and socially important project. Of course, to take the place on the market is a very difficult task. The brand SPELO-ZRELO has been existing for just a year and a half, but I want to say with confidence that our product line of 70 titles is of the best quality and already familiar to consumers in more than 60 regions of Russia. On the shelves of many retailers, you can see and try the preserved fruits and vegetables of SPELO-ZRELO. And we will expand this business.

One of my mottos: think big, no, yet bigger ... So, we decided to try ourselves on the market of mineral and soft water in parallel with conservation. Be here is very difficult. Nevertheless, putting the emphasis on quality, we hope to take a leading position here. Our water "PEARL OF ELBRUS", produced at the foot of the highest mountain in Russia, is not inferior to the most popular brands in all indicators.

RFS: There was information in the media that the Diamond Holding has once again won the honorary title "Attractive Employer of the Year."

Zaur Balagov: Yes, we are constantly looking for professionals as we grow and expand our business.

We are looking for not just good specialists, but professionals. To register a company is just 1 percent of the case, 99 per cent is the daily constructive work on team building, understanding of the business philosophy and implementation of tasks. Simply speaking, the desire gives birth to the dream.

A large-scale study of direct employers, about 850 000 companies, has been conducted this year by one of the largest recruitment portals in Europe - Superjob. According to it, each of our employers, having high professionalism and performing their duties in full, creates a positive image not only of the company, but of the entire domestic business.

RFS: I would like to ask, does the Russian food industry have a future?

Zaur Balagov: I'm an optimist by nature and think that we do not just have the opportunity and the future for our domestic market, Russia with such a huge territory and so many talented indifferent people can certainly become the largest exporter of high-quality, environmentally friendly products to the world market.  

The specific objective in a combination with perseverance and faith is a key to success!
 

Instead of an epilogue

The social responsibility of business is also a responsibility of each individual person. During the conversation, Zaur Balagov left unobtrusively on the answer to this question. Only from the Internet we found out that on his initiative Diamond Holding sponsors the Russian national football team, the film "Cherkessia Foreign land" was shot a few years ago with the help of of Mr. Balagov, and the ceremony of awarding of the winners of the international contest "For the good of the Motherland" has been held more recently with the participation of the company.