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Business community supports measures to curb food trade monopoly in Belarus

Economy 14.06.2019 | 14:07
An archive photo
An archive photo

MINSK, 14 June (BelTA) – Food trade requires additional regulations. The measures proposed to counteract food trade monopolization have been backed by the business community. The statement was made by Belarusian First Deputy Antimonopoly Regulation and Trade Minister Artur Karpovich at a session of the public advisory board under the aegis of the ministry on 14 June, BelTA has learned. The session focused on a draft presidential decree on counteracting monopolization in the area of trade.

Artur Karpovich stressed that the document is designed to encourage competition. “Consumer goods represent one of the most sensitive articles of expenditure for Belarusians. This is why these matters require constant attention on the part of the government. They require enforcement and adjustment of rules of the game and oversight over their fulfillment,” he added.

Right now nine codes and laws, 26 presidential decrees and ordinances, over 30 government resolutions, and about 50 departmental regulations directly affect trade and public catering industries. The share of retail chains in the total number of shops exceeds 60%. It is close to 80% if the share is measured in terms of floor space. The number of retail chain shops nearly tripled in the last four years and now stands at 30,000 out of 49,000. Retail chains with the market share of over 20% have been allowed to grow in certain rural areas without restrictions.

Artur Karpovich noted: “In January 2019 the Antimonopoly Regulation and Trade Ministry received a collective request from six business communities with an initiative to establish an interagency working group on working out a regulatory act to enforce additional regulations on major retailers. This piece of legislation is supposed to restore the share of small and medium businesses in the country's retail trade turnover. The business communities believe that this share should be at least as large as 50%.”

The official noted that the working group on drafting the presidential decree comprises 26 representatives, including those representing the entrepreneurship promotion council and major retailers. Six sessions have been held. All the points were discussed in detail during the last one. Remarks of all the interested parties were taken into account. International practices in 27 countries were studied.

Some of the participants suggested expanding the effect of the presidential decree on non-foods, but the suggestion was turned down.

Over 20 organizations and government agencies, including all the oblast administrations and the Minsk City Executive Committee, have approved the draft presidential decree without any remarks. Artur Karpovich stressed that the current restrictive measures are not sufficient because the Antimonopoly Regulation and Trade Ministry is looking into several complaints about violations of antimonopoly regulations.

OOO Eurotorg Director General Andrei Zubkov noted that, as a matter of fact, the new decree will apply only to Eurotorg shops for the next ten years. In his opinion, this piece of legislation will affect the company's performance. The company's market share is close to 20% now. “We believe the decree represents a risk for us,” the director general noted.

In turn, Co-chairman of the Republican Confederation of Entrepreneurship Viktor Margelov pointed out that if the market is not balanced, the existing situation will have a negative effect on the economy. “We support the decree because it is a step in the right direction,” he believes.

Chairman of the Presidium of the Republican Confederation of Entrepreneurship Vladimir Karyagin said that the business community spoke about the need to develop such a document a long time ago. It will have a positive effect on competition in trade industry.

A retailer, which share in the country's retail trade in food exceeds 15% in the previous fiscal year, is recognized as a dominating market player. The draft presidential decree on counteracting monopolization in trade enforces additional restrictions on dominating market players.

The draft decree also forbids retailers from forcing suppliers and producers to accept discounts and promo campaigns. The draft decree disallows forcing conditions with an option to unilaterally terminate contracts without good reasons. It also forbids demands for the payment of bonuses, premium, and so on.

Some provisions of the decree cover advertising activities and provide for administrative punishments for violating these norms.

The draft decree is available on the website of the Belarusian Antimonopoly Regulation and Trade Ministry. Public discussion will continue through 20 June 2019.

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