Retailers were allowed to exceed the threshold of 25% when buying companies that left Russia
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Russian President Vladimir Putin signed a law that allows food retailers to acquire trading floors of companies that have left Russia until 2024, without taking into account the company’s final share in the Russian market.
In accordance with the law, a grocery chain is allowed to exceed the threshold of dominance of grocery chains in the regions – 25%, by acquiring retail space from companies that are controlled by foreign citizens and have decided to leave the Russian market. The law extends the permit until the end of 2023.
Foreign companies leave the Russian market after the start of Russia’s military operation in Ukraine. Some of them explain this decision by the difficulties of working in Russia due to Western sanctions that impose restrictions on financial transactions, trade and logistics.
By data Center for Strategic Research, since February, 7% of companies have announced a complete withdrawal from the Russian market, 34% of companies have limited their activities in the country and 15% have transferred assets to the new owner of the Russian division.
On May 18, Prime Minister Mikhail Mishustin announced the government’s intention to suspend the 25% share limit for retailers until 2023. However, the government’s initiative has caused serious concern for food suppliers. In the address of the manufacturers, which Kommersant got acquainted with, it was noted that further strengthening of the dominance of networks threatens to restrict access for suppliers and may lead to an increase in the price level in the Russian market.
Read more about why the suppliers were against – in the material “Kommersant” “A quarter in one hand”.
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