Rusprodsoyuz fears excesses due to measures against unreasonable price increases

Deputy Chairman of the Board of the Rusprodsoyuz Association (manufacturers

and suppliers of food products) Dmitry Leonov said that business is afraid of “excesses and risks” if a ban is introduced to raise food prices without economic justification. Previously, the Federal Antimonopoly Service (FAS) proposed punishing large companies for increasing the cost of goods by 30% or more within 60 days without justified reasons.

“Businesses are reassured that the application (of the law – Kommersant) will be exclusively by order of the government upon confirmation of price fluctuations by the Ministry of Economic Development, but excesses on the ground cannot be excluded if the procedure for bringing to responsibility is simplified,” said Dmitry Leonov (quoted from RIA News”).

He added that the main risk of the FAS initiative is associated with holding liable any market participant whose annual turnover is above 800 million rubles. Small and medium-sized businesses also fall into this category, explained Mr. Leonov.

The FAS proposal, according to the deputy chairman of Rusprodsoyuz, contains “a rejection of the economic postulate that in highly competitive markets the price is set by the balance of supply and demand.” The antimonopoly service said that the law makes it possible to suppress “unfair behavior” of individual companies, and the measure itself will be temporary.

Previously, Prosecutor General Igor Krasnov instructed check regional producers of chicken eggs due to the sharp rise in prices for this product. Rusprodsoyuz reported that the rise in price is due to a jump in their consumption, the closure of poultry farms due to bird flu and an increase in costs.

The FAS developed the ban on setting economically unjustified prices for products on behalf of First Deputy Prime Minister of Russia Andrei Belousov. In the explanatory note to the bill, the service cited “unfair behavior of market participants” as the reason for the increase. The documents say that the ban will remain in effect until the end of 2024.

Read more about attempts to curb rising food prices in the Kommersant text. “Food Conspiracy”.

Petr Buzlaev