Uzbekistan to delay mandatory aggregation system for water and soft drinks

The aggregation requirement, introduced on April 1 as part of the country’s digital labeling system, is intended to track products throughout the supply chain – from manufacturers to wholesalers and end consumers – while helping reduce the shadow economy.

However, the measure has drawn criticism from businesses, particularly beverage producers, who say the industry is not yet technically ready for full implementation.

Business Ombudsman Abdumannon Burkhanov told the Uzbekistan 24 TV channel that the issue was discussed during a May 5 meeting chaired by President Shavkat Mirziyoyev on challenges affecting the business environment.

Burkhanov said authorities found that five of Uzbekistan’s 10 largest beverage producers, which together account for around 90% of the market, were not prepared to implement the system.

“When we reported this to the president, he proposed postponing it,” Burkhanov said. “The process had already been postponed twice, from April 2024 to 2026. The president said: ‘Fine, let us postpone it again. The system will be introduced when our entrepreneurs are ready.’”

He added that entrepreneurs’ concerns over signage regulations and urban design code requirements were also discussed during the meeting.

Aziz Umrzakov, head of the Tax Committee’s Department for Tax Methodology, said two issues related to digital labeling were reviewed.

“Given that the system enabling the tracking of goods from manufacturers to wholesalers and final consumers is highly technological, it was decided to postpone the effective implementation of these instruments in order to achieve the intended goals,” he said.

Umrzakov added that the government also discussed penalties linked to the digital labeling system, another major concern for businesses.

He added that President Shavkat Mirziyoyev proposed reducing sanctions for manufacturers, wholesalers, and importers, while fines for retail and catering businesses would become fixed penalties rather than being tied to revenue levels.

Uzbekistan has been gradually expanding its digital labeling system across several industries as part of efforts to improve tax collection and curb illicit trade, but the rollout in the beverage sector has sparked debate among market participants over implementation costs and technical readiness.