The procurement expert explained the nature of the cartels in social nutrition

The reason for the appearance of cartels in the social food market may be the evolution of a local oligopoly, Evgeny Lando, general director of the Contract Systems law firm, told Izvestia.

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"Several real suppliers, knowing that new players are not expected, can come to an agreement to minimize risks and costs. It is easier for them to fix the status quo and prices than to invest in a price war that will eat up the already low margin in the social sphere. Collusion becomes for them a survival tool in a closed system," he explained.

According to him, in the field of baby food in the regions, as a rule, there is a local market with high barriers to entry. In practice, this results in a "natural oligopoly": in a particular area or city, there may be only two or three companies that are actually able to organize the purchase of high-quality products, cooking at a specialized food store, delivering hot meals strictly on schedule, and so on.

Read more in the Izvestia article:

We figured it out for three: how cartels appear in the baby food market

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