Translated material
How to bargain
The government may abandon the 50 percent market quota for local producers
There are two and a half months left to completely change the system of retail markets in the country. There are now more than 5,200 markets in Russia, a quarter of which may have to be closed due to non-compliance with new legislation. However, the Ministry of Economic Development is confident that neither the closure of markets nor the complication of work for those remaining, which will inevitably lead to an increase in rents, will affect inflation.The only norm that the government is ready to waive if necessary is the 50 percent quota for local producers. “We are giving ourselves a season to see what happens and, if necessary, make adjustments,” Deputy Minister of Economic Development and Trade Andrei Belousov said yesterday.
19% of the total trade turnover in the country comes from retail markets. According to Rosstat, residents of the country buy 60% of clothing and 46% of vegetables and fruits in markets. Moreover, in some regions these figures are much higher. Thus, in the Smolensk region, 40% of all goods are purchased on the market; in Karachay-Cherkessia and Dagestan, retail markets account for almost 70% of the total turnover.
According to official data, the annual turnover in the markets exceeds 1.7 trillion rubles. According to expert estimates, it is three to five times higher. At the same time, according to Mr. Belousov, “the situation is close to a nightmare: the markets are in a terrible sanitary condition, it is impossible to find the owner; the market is controlled by a group of people by proxy from a company that is located unknown where, and it is unclear who will be responsible if something happens.”
The federal law regulating retail markets takes effect in two weeks, and all markets must be converted by June 11. Now, according to the law, the “owner of the market” will be a management company registered at the location of this market. Companies will be selected by municipal authorities in a licensing manner, which, as Mr. Belousov admits, is close to licensing. The management company will maintain a register of sellers and a “safety passport”, monitor fire safety and compliance with sanitary standards.
Increased costs for the management company, and, consequently, increased rents for sellers, according to MEDT calculations, are inevitable. However, the ministry believes that this will not have a noticeable impact on price growth. “We do not think that the price increase will go beyond seasonal fluctuations,” says Mr. Belousov.
Experts interviewed by Vremya Novostei agree with him. According to the vice-president of the public organization OPORA, Vladislav Korochkin, in any normally operating market there is already a whole staff of personnel, so there should not be a large increase in costs. Anton Struchenevsky, senior economist at the Troika Dialog investment company, believes that “against the background of the summer decline in prices for fruits and vegetables, the population will not notice any changes at all.”
However, as Deputy Head of the Ministry of Economic Development and Trade Andrei Belousov noted, inflation this year is growing at a lower rate than predicted, so there is still a margin of safety. In any case, the state does not intend to leave market activities without its close attention. By the end of the year, the Ministry of Economic Development will prepare a basic trade law regulating relations between national and regional retail chains, as well as between chains and manufacturers, and between chains and small entrepreneurs.