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- Look into the tuber: the Prosecutor General's Office and FAS were asked to deal with excessive markups on potatoes
Look into the tuber: the Prosecutor General's Office and FAS were asked to deal with excessive markups on potatoes
The Prosecutor General's Office and the Federal Antimonopoly Service are being asked to check the growth of retail chains' mark-ups on potatoes. Such an appeal to the agencies was prepared in the State Duma. The deputies claim that potatoes are now sold in retail chains at four or five times the wholesale price, but producers say only about a twofold markup. Parliamentarians remind that this product is categorized as socially important, while its cost continues to increase weekly. The Ministry of Agriculture told Izvestia that together with the Ministry of Industry and Trade they are working on transferring producers and retail chains to direct long-term supply contracts. Meanwhile, the FAS has already initiated four cases against logistics centers for violation of the law on trade.
Russia is asked to check potato prices
The Prosecutor General's Office and the Federal Antimonopoly Service (FAS) are asked to check the validity of potato prices in retail chains. Anatoly Vyborny, deputy chairman of the State Duma Committee on Security from the United Russia party, made such a request to the agencies. The document was familiarized with "Izvestia".
- I am addressed by voters who do not understand the reasons for the sharp rise in the price of potatoes. According to official Rosstat data, the price of this vegetable has risen by 74% since the beginning of the year. At the same time, there is no shortage of potatoes in Russia today, nor is there a rush demand for them. Why are there such "mark-ups" in retail? If potatoes cost from 10 rubles in wholesale, the price in stores is four to five times higher," explained the deputy.
According to him, some stores sell potatoes from Br85 and more expensive - despite the fact that this product is classified as a group of socially important. Anatoli Vyborny reminded: last year, retail chains were obliged to keep the markup on such goods at 5%.
- In this regard, I appealed to the Prosecutor General's Office and the Federal Antimonopoly Service with a request to check the pricing of potatoes in retail chains. The vegetable, as Rosstat reports, is increasing in price every week. It is necessary to take immediate measures, as for many families in the Russian Federation potatoes are one of the basic foodstuffs, - the deputy emphasized.
The politician gave "Izvestia" one of the appeals of citizens about prices. It reports that prices for potatoes in bulk, offered on various Internet aggregators from farmers, start from 10 rubles per 1 kg, depending on its size. For 20 rubles you can buy the highest grade product, the letter says. At the same time, the document provides links to the prices of retail chains, which sell potatoes starting from Br40-50 per 1 kg.
"Izvestia" sent a request to the Prosecutor General's office with a request to comment on the prospects of checking the markup on potatoes by retailers. Earlier, the head of the department Igor Krasnov ordered a similar check on the cost of milk, after which the prices for the product decreased.
According to the analytical center of the Association of Retail Trade Companies (ACORT), this year's purchase prices for potatoes more than doubled compared to 2023 on the background of a low base caused by last year's record harvest.
- The increase in purchase prices, in addition to the impact of the low base, is explained by the growth of producers' labor costs and the reduction of sown areas due to weather conditions.
Trade cannot fully damp the growth of purchase prices and is forced to partially translate it into changes in the price on the shelf. At the same time, retail prices for potatoes in large retail chains grow slower than purchase prices due to the policy of price restraint by retailers," Igor Karavaev, Chairman of the Presidium of ACORT, explained to Izvestia.
According to him, retail chains - members of ACORT sell the most affordable potatoes at retail prices lower than purchase prices by 0.5-2%, as well as stretch the price rise over time.
- On average in the country in all formats of trade potatoes cost 52.5 rubles (according to Rosstat as of November 18), at federal retailers potatoes "first price" is more than 20% cheaper, and the cheapest potatoes can be bought for 22 rubles per kg. We have repeatedly said that we welcome an approach that analyzes pricing processes at all stages of the supply chain. It is also important that all market participants make joint efforts to curb price growth, and regulatory measures do not lead to unbalancing of the market, - said the business representative.
The editorial staff addressed questions to the largest retail chains with a request to comment on the size of the markup on the vegetable.
Reasons for potato price rise
Autumn potato price rise began in Russia in mid-October - actually at the same time as the end of its harvest. In one week of last month in a number of regions it rose in price by more than 5%. As "Izvestia" reported, the increase in retail prices was previously recorded by statistical agencies in a number of subjects. The biggest increase was noted in the Volgograd region - by 5.9%. Since then, according to the official statistics of Rosstat, vegetable prices have been rising every week. According to the latest data of the service, since the beginning of the year their growth has already amounted to 73.82%.
The FAS said that they are already taking measures to stabilize the price rise.
- FAS is analyzing the prices of a number of socially important food products, including potatoes "first price". The service notes that between producers and retail stores there may be one or more wholesale organizations and transport companies involved in logistics, storage, processing, sorting, packaging, which also affects the final cost of the product," the service told Izvestia.
At the same time, the agency similarly exercises control in these intermediary links.
- For example, territorial bodies of the FAS have already initiated four cases against logistics centers. They were recognized as violating the law on trade and fined," the service explained to Izvestia.
Measures to stabilize potato prices
The Ministry of Agriculture told Izvestia that they are also working to stabilize potato pricing.
- The Ministry together with the Ministry of Industry and Trade is carrying out systematic work on transferring producers and retail chains to direct long-term supply contracts. This makes it possible to ensure predictable volumes of products and prices for them in retail, which helps to maintain a stable situation in the market of potatoes, vegetables and other products," the Ministry's press service reported.
At the same time, they emphasized that there is no deficit of this vegetable in Russia today.
- Despite the difficult weather conditions of the current year, Russia is expected to have a good potato harvest - not lower than the average for the last five years. According to preliminary estimates, it will amount to about 7.3 million tons in the organized sector, which corresponds to the level of 2022. This volume will allow to meet the bulk of domestic needs," the ministry said.
They also reported that in the first half of next year the Russian market will traditionally receive imported young potatoes from friendly countries, which will complement the assortment in the off-season.
But the Potato Union said that this year Russia has produced few vegetables that fall under the standards of retail chains.
- For two years we have been in a state of low price for potatoes - 11-12 rubles per 1 kg. This is due to the fact that last year we had a record harvest of 8.6 million tons. The low price affected the profitability of our sector and led many farmers to reduce planting areas. In addition, the weather intervened and affected the quality of the product. This has led to the fact that there is now a shortage of potatoes from the point of view of retail chains that meet their requirements. This is proved by the prices we see on the shelves," Tatyana Gubina, head of staff of the Union of Potato and Vegetable Market Participants (Potato Union), explained to Izvestia.
According to her, small potatoes are sold for 10 rubles, while the price of a vegetable from 20 rubles in wholesale should include the price of pre-sale preparation.
- The wholesale price of potatoes today is fair. Last year it was Br10 per 1 kg, this year it's Br20. As for the price of a vegetable in retail chains, one must also take into account logistics, whether there are intermediaries between producers and retail chains, and how the goods are packaged and sorted," the expert explained.
New legislative norms on food prices
In the State Duma Committee on Protection of Competition as one of the main reasons for the rise in food prices consider the requirements of retail chains to suppliers to enter the trading floor.
- We have drafted a bill that would allow the FAS to initiate cases on violation of antimonopoly legislation by retail chains without control inspections if they fail to provide information on the conditions for selecting suppliers, as well as violated the requirements of the contract for the supply of food products," Sergei Lisovsky, deputy chairman of the committee, told Izvestia.
According to him, today some retail chains have set up logistics centers, which formally have nothing to do with them. But in fact, suppliers can not enter the networks until they give their products to these centers, which put them their own conditions, including all sorts of bonuses, requirements for the disposal of unsold products and so on, explained the deputy.
- Today , to establish a violation, the FAS must first recognize that the logistics center is part of a retail network, to establish the fact of imposing certain services, which is often very difficult, because the participants in the process do not submit the necessary documents, afraid to provide real contracts, and then introduce regulation. Therefore, we want to enable the service to accelerate the adoption of these measures. Of course, this situation affects the final cost of goods, as suppliers are forced to lay down their losses from the requirements of retail chains, - explained the deputy.
If we want our society to be satisfied with the price, then first of all it is necessary to take control of retail chains, which today earn much more than producers, Leonid Kuznetsov, chairman of the association "People's Farmer of Chuvashia" told "Izvestia".
- Today we sell potatoes in wholesale at 25-30 rubles with VAT and delivery, while in stores they cost 50-60 rubles. That is, the markup is twice as much. This applies not only to potatoes, but also to processed products. For example, we also produce potato chips. If they cost 50 rubles per 100 grams in wholesale, they cost 105 rubles in stores. That is, why build factories or workshops when you can make money by overbuying? - wondered the business representative.
At the same time, suppliers can't just get into the chains, they have to pay for entry. Thus, manufacturers are driven into a framework of prices from which retailers can make money. To solve this issue, it is necessary to limit the markup of chains at the federal level, the expert believes.
