FAS figured out how to deal with the speculative rise in food prices

The Federal Antimonopoly Service decided to seriously fight against the unreasonable rise in food prices. This was announced by the deputy head of the FAS Sergei Puzyrevsky. The service, which is “both dangerous and difficult and seemingly invisible at first glance,” has developed a mechanism against speculative food price hikes that could become law as early as this fall.

Puzyrevsky, in particular, said that last year the number of complaints about the overpricing of products increased. The list of “offenders” is quite large – potatoes, beets, onions, carrots, cabbage, sugar, rice, salt… In a number of cases, the FAS believes that the reason for this is “unscrupulous, speculative behavior of market participants in relation to consumers.”

In accordance with the draft law developed in the depths of the FAS, if prices rise by more than 30% in a short period of time, the antimonopoly service, on behalf of the government, will check the economic feasibility of this and stop unfair actions of market participants. It is possible that this bill will be submitted to the State Duma for consideration in September, the deputy chairman of the Federal Antimonopoly Service expressed his hope.

Until recently, it was believed that the problem of unjustified price increases in Russia was completely and completely defeated. Retail chains, manufacturers and processors, under the watchful eye of officials, anti-monopolists, and sometimes prosecutors, assumed “voluntary” obligations not to increase the margin on socially important products by more than 5%. And the matter seemed to be in the bag: traders in a blue eye declared that they strictly adhered to the agreement, although consumer prices, of course, were growing.

Here we must also add that in the minds of Russians, state measures to combat inflated food prices have long been confused. Back in 2010, a decree of the government of the Russian Federation determined the procedure for introducing marginal retail prices for socially significant products. In total, this list includes 24 types of food, including bread, milk, sugar … Then it was planned that if within 30 days one of the products rose by at least 30%, the Ministry of Economic Development sets maximum minimum retail prices for 90 days.

Later, in December 2020, after an abnormal rise in the price of sugar and sunflower oil, when the President of the Russian Federation personally intervened in their pricing, the control procedure was greatly tightened. The minimum wage should have been introduced not after a 30% increase in the price of social products, but after a 10% increase, and without taking into account seasonal fluctuations.

A quick question: which of the regulations is in force today: soft (30%) or hard (10%)? The question is rhetorical, because prices sometimes grow by 20 or 40% in a short period of time, and no one is going to reduce them. You don’t have to look far for an example. According to Rosstat, in June, the price of carrots in the country rose by an average of 22%, potatoes by 21.5%. Have you heard of any government interference?

What new will the third bill on this topic give us? Will it be executed? Or, just like its predecessors, will it go down on the brakes?

The Chairman of the Union of Consumers of Russia, Petr Shelishch, suggests that the FAS bill will spell out a mechanism for implementing price monitoring. “The current law states that the government, under certain conditions, has the right to introduce maximum minimum prices for some socially significant products. But there is no mechanism for the implementation of this right. Now they will do it,” Shelishch believes.

In this case, the question arises: why only now did you decide to create a mechanism for implementing this law – that is, inspections on behalf of the state? Most likely, the government realized that the purchasing power of the population has declined sharply and that special control over price increases is needed so that trade does not profit from the misfortune of consumers.

In the first quarter, according to Rosstat, the income of the population increased by an average of 0.1% in the country, and even then in annual terms. And at the end of 2022, they decreased by 1%. In general, some analysts believe that the purchasing activity of Russians has decreased by 35-40% since 2022.

Not according to statistics, but in real life, the decline in consumer demand is noted by food producers themselves.

“I used to travel around with my goods to garden associations,” says Stepan Solomnikov, a farmer near Moscow. – The cashier’s check averaged 2,000 rubles. Today – 700 rubles …

Meanwhile, the FAS document, which has not yet been adopted, revealed its own “pitfalls”.

– The main risk for both retail chains and suppliers is the possibility of holding liable any market participant whose annual turnover is more than 800 million rubles, – says Dmitry Vostrikov, executive director of the Rusprodsoyuz Association. – Without proving additional elements – collusion, signs of a cartel and a monopoly position. In fact, we see a rejection of the economic postulate that in a highly competitive market the price is set by the balance of supply and demand. Businesses are reassured that the application will be exclusively by order of the government upon confirmation of price fluctuations by the Ministry of Economic Development. But local excesses cannot be ruled out if the procedure for bringing to responsibility is simplified.

Published in the newspaper “Moskovsky Komsomolets” No. 29072 dated July 18, 2023

Newspaper headline:
FAS against speculators