The Federal Antimonopoly Service (FAS) and the largest retail chains are close to ending a dispute over retail margins. The anti-monopoly authority will receive information from the chains on the purchase and shelf prices for 25 basic food products, for which the chains can also establish a range of “fair” markups. Analysts and market participants fear expansion of regulation, in which suppliers may abandon the production of unprofitable goods.
The largest retail chains will provide FAS with information on purchase and shelf prices for a number of products for the analysis of margins. The issue was discussed at a meeting at the FAS on August 19, sources in the market told Kommersant. According to them, monitoring will affect 24 names of socially significant products (meat, fish, milk, eggs, cereals, salt, tea, bread, etc.), as well as beets. The Federal Antimonopoly Service also offers the networks to establish a range of “fair” markups for these products, adds a source of Kommersant. The FAS did not answer questions.
Last Friday, the FAS conducted unscheduled inspections of X5 Group (Pyaterochka, Perekrestok, Karusel), Lenta and Magnit chains. As the service specified, the reason was the incoming requests with information about the rise in prices, and the purpose of the inspections was to prevent an unreasonable increase in the cost of socially significant products. According to Kommersant’s sources, on the same day, the FAS held a meeting with representatives of the chains, at which officials pointed out, in their opinion, the inflated markups for certain goods, and also discussed options for adjusting the markups.
The FAS is acting within the framework of the order of the President of the Russian Federation Vladimir Putin on the submission of quarterly reports on food prices, sources say to Kommersant. According to one of them, the service should report on its work on September 1, then it is planned that the monitoring report will become quarterly. The FAS is already the third entity that collects data on prices: in addition to Rosstat, networks regularly send information about the dynamics to the Ministry of Industry and Trade, says the source of Kommersant. According to him, based on the text of the instruction, monitoring was planned along the entire chain, but so far it is known only about checks in retail chains. X5, Lenta and Magnet did not provide a comment.
Senior analyst at Gazprombank Marat Ibragimov explains that for socially significant products, the buyer determines the general price level in stores, so the chains try to keep a small margin on them. “In this their interests coincide with the FAS,” he notes. Mr. Ibragimov sees the risks of such a scheme in a possible transition from monitoring to regulation. According to him, manufacturers’ costs are growing, and without the ability to index selling prices, companies may refuse to release unprofitable assortments, which will ultimately lead to a shortage and even greater inflation on the shelf.
Dmitry Vostrikov, executive director of Rusprodsoyuz, says that the association has a positive attitude towards increasing market transparency and pricing as well. But, he stresses, the question of mark-up is not so simple. “The retail price of a product is hardwired into many components: the cost of delivery to a retail outlet, rent in a particular region, tariffs for housing and communal services. How, taking into account these factors, conclusions will be drawn about the “acceptability” of this or that margin, and most importantly, what sanctions will ultimately be applied to those networks who, according to the regulator, greatly overestimate it, is a question, ”says Mr. Vostrikov. According to him, it is also unclear whether this approach will solve the problem of high food prices for the population.
An alternative could be building fair rules of the game on the market, according to Rusprodsoyuz. These are long supply contracts with a scheduled and agreed order plan, the possibility of prompt price changes for objective reasons, the complete elimination of payment for the introduction of goods into the network, the abolition of pseudo fines, Dmitry Vostrikov lists. According to Kommersant’s interlocutor in a large manufacturer, if the chains control the mark-up on some products, they will be able to earn more on other assortments, and the effect on shelf prices will be limited. The danger here is in the strengthening of regulation, following the example of Belarus, where the state controls the mark-up on socially significant products at all stages, he points out.
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