Legislation is a complex process in all respects. First of all, a good law is a balance of interests and ways to achieve the goal. Inaccurate wording, one poorly calculated indicator introduced into the rank of law create problems and obstacles to successful development. Andrei Savinykh, the Chairman of the Standing Committee on International Affairs and member of the Council of the House of Representatives, speaks about how MPs work on the laws and why they should get intimately familiar with the things spelled out even in ‘non-core' bills in an interview with BelTA.
The trade and public catering bill is currently under consideration in the House of Representatives. There were quite a lot of discussions with experts in the relevant standing commission. I also participated in this work and suggested three amendments, two of which passed through as we managed to find a common ground. But we failed to reach an agreement on one of the amendments.
i>– Let's immediately clarify what amendments you have made?
I have proposed to establish a clearer distinction in the law between the concepts of wholesale trade and retail trade. Here we have legal conflicts that create problems for both business and traders. In more detail, we have a situation when any deal between two legal entities is considered wholesale trade. This is true if an enterprise is going to use the product for commercial purposes, for resale for example. What if the product is for your own consumption? This causes many problems, both in terms of taxation and in terms of sometimes pointless additional regulation. As a result, this situation was conducive to fraud. For example, a person is given a bonus to buy necessary goods as an individual, although these goods are intended for the whole team. We are trying to rectify this. The Ministry of Antimonopoly Regulation and Trade has decided to meet the needs of business and is now working to resolve this issue in the methodological recommendations which will eliminate these shortcomings.
There is one issue that has not been agreed upon.
This is about the 20% market share limit for retailers in the regions. This is not a problem for large cities, but this issue is very sensitive for small and medium-sized towns. The sales threshold in the retail network is immediately reached with the opening of just one big store there. There is an opportunity to open a second store, and people want it, but there is no legal ground to do so. I saw a large number of appeals from citizens to increase the number of stores, but the retail network cannot do it legally. The first to suffer in this situation are customers - our citizens, residents of these towns.
This norm was introduced in order to stimulate competition. However, applying this norm in small and medium-sized towns, we, in fact, slow down this competition! Because of this, prices in Minsk and small towns vary – they are higher in small towns. Thus, we punish residents of these towns, and these are five million people.
The argument is quite reasonable. What is a counterargument?
I looked very carefully for any data that could confirm the positive effect of the 20% limit. I did not find it!
On the other hand, we have information, and I studied these materials, how this threshold was canceled by a presidential decree as an experiment in Orsha District. We can see there a rapid and successful growth of retail chains!
It is worth mentioning that the number of stores we have in small and medium-sized towns is two to three times lower than the one in the neighboring countries!
This proves that the 20% threshold is an outdated measure. We have not seen any positive changes since 2014. I made a proposal to increase the threshold to at least 25%, but the Ministry of Antimonopoly Regulation and Trade does not agree, and I do not understand why.
Is there no way out?
I cannot agree with this. Moreover, I see positive externalities from increasing the threshold to 25%. More than that, I absolutely do not see any negative consequences for antimonopoly regulation, because there is an antimonopoly law, and the Ministry of Antimonopoly Regulation and Trade has enough powers and tools to influence the situation.
You can also have a look at international practices. In Russia the threshold is 25% and there is a proposal to increase it. In Kazakhstan there is no such threshold at all, as in many European countries. In Switzerland, for example, the retail market is divided between three retail chains, and no one suffers from excessive monopolization.
Therefore, I decided to push for my position and I will try to bring it home to MPs: I plan to organize a round table on the eve of the discussion of this bill in the Oval Hall and I will demand that my amendment be put to a separate vote.
I am convinced that we should listen to business. We must create favorable conditions for the dynamic development of retail chains. Ultimately, this will lead to increased competition, lower prices for consumers and the emergence of programs that will help small businesses enter retail chains faster and offer their products to customers.
