Russia investigating supermarket price fixing

RUSSIA / FSU POLITICS - In Brief 19 Aug 2021 by Alex Teddy
On August 17 the competition authorities began to look into whether the major chains have formed a price cartel. The anti-monopoly service is probing X5 Group, which includes Pyaterochka and Perekrostok. Magnit and Letna are also under investigation.The aim is to forfend undue food price rises. This is a sensitive political issue. Parliamentary elections are due in September 2021, and the Kremlin is worried that the cost of living may cost its party, United Russia, dearly.Inflation is dogging an otherwise robust economic recovery. Inflation is 6.5% in annualized terms. That is the highest since 2016. The Central Bank wants it down to 4%.Price caps and export limitations were introduced in 2020. These have been semi-effective. The Prime Minister slammed corporate avarice for price rises. Supply chain disruptions due to the pandemic are partly responsible for the price rises. The competition authority can fine companies a maximum of 15% of their turnover. That would be USD 54 billion if all these supermarkets get the maximum fine. It is improbable that major fines will be imposed. These supermarkets are too important. The government does not want them to go bust. The investigation is partially electioneering.

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