Unimilk is accused of limiting competition

Yesterday, Krasnoyarsk antimonopoly officials accused Unimilk LLC of violating the Law on Protection of Competition. The claims of OFAS specialists were caused by the practice of imposing retail prices on products on distributors and sellers, as well as deliberately limiting sales markets. Unimilka rejects accusations of non-market trading methods, stating that we are talking about a “system of prospective and retrospective discounts.” The fact that the Krasnoyarsk department of the Federal Antimonopoly Service (UFAS) issued an order on grounds of violation of Art. 11 of the Federal Law “On Protection of Competition” addressed to Unimilk LLC and its local distributors - Mol-Kom Enisey LLC and two individual entrepreneurs from Zheleznogorsk and Sosnovoborsk, deputy head of the department Oleg Kharchenko said yesterday. According to him, Unimilk signed an agreement with distributors in which “illegal price premiums were established for dairy products and the market for their sales was limited.” “We have established that under these agreements, distributors do not have the right to sell products outside a certain territory. In addition, Unimilk obliged the companies to agree on the prices at which the products would be sold,” said Mr. Kharchenko. According to antimonopoly experts, the agreements allowed Unimilk to “maintain prices for its products using non-market methods, while limiting competition between market entities.”
The Unimilk group of companies was founded in 2002, and today is one of the leaders in the Russian dairy industry (occupies about 15% of the market). The holding includes 25 Russian and two Ukrainian dairy enterprises, as well as 72 regional trade offices. In 2006, Unimilk's sales volume exceeded 1 million tons, revenue - 22 billion rubles. Unimilka does not recognize the claims of the Krasnoyarsk OFAS and claims that “all transactions with counterparties comply with the requirements of the law.” “We do not set price premiums for products; our buyer sells the goods at his own discretion. We provide discounts to counterparties; this is a very flexible system of prospective and retrospective discounts,” explained Evgenia Galtseva, lawyer at Unimilk LLC.
In the ALPI retail chain, antimonopoly officers are also dissatisfied with the agreements between which and Unimilcom, they are confident that no one violated the law “On the Protection of Competition.” “We do not fully understand the claims of the Federal Antimonopoly Service; I do not see any violations of antimonopoly legislation in our actions. But, even if they are found, I think that we will correct the agreements with Unimilk,” emphasized ALPI lawyer Sergei Molchanov.
Participants in the Krasnoyarsk dairy market do not undertake to judge whether Unimilka’s agreements with distributors limit competition. “Our products are available in ALPI hypermarkets; we do not see any dumping on the part of Unimilk. We didn’t observe anything bad with our competitors,” noted Vladimir Kurakin, head of the sales department of Nazarovskoe Milk OJSC.
Unimilk and its distributors will receive an order to eliminate violations of the Law “On Protection of Competition” within ten days. “The issue of bringing them to administrative responsibility will be decided additionally. If we make such a decision and prove collusion, the companies will face an administrative fine in the amount of 4% to 15% of turnover in local markets,” said Oleg Kharchenko.
Kommersant will monitor developments.
Nonna Goncharenko, Krasnoyarsk

Kommersant (Novosibirsk) No. 167 dated September 14, 2007, p. 15

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