22.12.08

The draft commerce law was submitted to the government with disagreements, the Deputy Minister of Industry and Trade Stanislav Naumov stated. The government had requested the document before December 1, he said, but no agreement was found among all departments. There are serious comments from the Federal Antimonopoly Service (FAS) and Ministry of Agriculture.

The standard market share threshold as stated in anti-monopoly laws is 35%. In previous versions of the commerce bill, that threshold would have been lowered to 5% for retailers in Moscow and St. Petersburg, and in other regions to 15%. If a company goes beyond this threshold, it must coordinate its actions with the FAS.

The Ministry of Industry and Trade dismissed this, as the threshold would be low compared with other industries and proposes allowing retail chains to take market shares of 50% or more, if the company can prove to antitrust regulators that the company’s actions do not restrict competition. However, the main criteria for determining the regulatory threshold must be trade volume, said FAS Deputy Director Andrey Kashevarov.

The measure is not likely to be the most effective, the CEO of X5 Retail Group stated regarding FAS's proposal. He is confident that stores in small towns could enlarge and control prices without having a large total trade volume and thus still escape FAS control. But if there is a chain store in each city, then because of the large total trade volume, the chain store can be recognized as dominant, even though the store does not occupy a dominant position in each city, the owner of the Magnet chain of stores added.

The Ministry of Agriculture want the ability to regulate prices on "socially significant" products, an item stricken from an earlier version of the bill. “We want to at least regulate markups on milk, bread and other socially significant goods in extreme conditions,” - said the Deputy Minister of Agriculture Nikolai Arkhipov on Friday.

Naumov promises that the Ministry of Industry and Trade will continue to discuss the bill with FAS and Ministry of Agriculture: “We will try to remove all the disagreements.”

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Source: "Vedomosti"