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Price Controls Return in Fight With Inflation

Published: August 15, 2014 (Issue # 1824)



  • Apples from Chuvashia are replacing Polish fruit that the Kremlin has banned in retaliation to Western sanctions.
    Photo: Vladimir Filonov / SPT

After a 20-year hiatus, direct Soviet-style price controls on the retail sector may be coming back, as the government strives to fight price hikes in supermarkets following Moscow's decision to ban swathes of Western food imports in retaliation for sanctions over the crisis in Ukraine.

The Federal Anti-Monopoly Service — the government's go-to body for browbeating retailers — is showing new vigor in the aftermath of the ban, which barred the import of meat, fish, fruit, vegetables and dairy products from the U.S., the European Union, Canada, Norway and Australia — all of which have slapped sanctions on Russia in response to Moscow's annexation of Crimea and support of separatist rebels in eastern Ukraine.

But it is not the state's only tool to fight price rises caused by the sudden rupture with European and North American suppliers.

After a series of top-level meetings involving Cabinet ministers, retailers, food suppliers and producers, the government this week produced a list of 40 food categories including meat, dairy products, bread, fruits and vegetables — together accounting for up to half what supermarkets sell. Retailers will have to report daily to the state the quantity and price of these goods, newspaper Vedomosti reported Wednesday, citing sources at two major retail chains.

This monitoring zeal beats even the Soviets, who under the planned economy required weekly stock reports from stores, but it has yet to translate into bona fide price controls.

"So far the government is just monitoring prices, but this could be followed by changes to legislature to put a freeze on them," said Valery Mironov, chief economist at Higher School of Economics' Center for Development.

Any new price controls would be ineffective, analysts said. One way or another, businesses will find ways to cover costs and generate profit.

"Prices will either grow in categories not on the ban list in compensation for the freeze or there will be a delayed price hike for the listed products," said Natalya Kolupayeva, senior analyst at Raiffeisenbank.

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ALL ABOUT TOWN

Friday, Oct. 24


SPIBA’s ongoing “Breakfast with the Director” series continues today, featuring Tomas Hajek, Managing Director of the Northwest Division at Danone Russia. Hajek will be discussing collaborations between businesses from different cultures. The meeting is at 9 a.m. at the Domina Prestige St. Petersburg hotel and all who wish to attend must confirm their participation by Oct. 23.


Get your gong on at “Sounds of the Universe,” a concert at the city planetarium this evening incorporating six different gongs to create relaxing songs that will transport you upwards into the stratosphere. Tickets are 700 rubles ($17).



Saturday, Oct. 25


AVA Expo, the eighth edition of the event revolving around all things pop culture, returns to Lenexpo this weekend. Geeks, nerds, dweebs and dorks will have their chance to talk science fiction and explore a variety of international pop culture. Tickets for the event can be purchased on their website at avaexpo.ru.



Sunday, Oct. 26


Zenit St. Petersburg returns home for the first time in nearly a month as they host Mordovia Saransk in a Russian Premier League game. Currently at the top of the league thanks to their undefeated start to the season, the northern club hopes to extend the gap between them and second-place CSKA Moscow and win the title for the first time in three years. Tickets are available at the stadium box office or on the club’s website.



Monday, Oct. 27


Today marks the end of the art exhibit “Neophobia” at the Erarta Museum. Artists Alexey Semichov and Andrei Kuzmin took a neo-modernist approach to represent the array of fears that are ever-present throughout our lives. Tickets are 200 rubles ($4.90).



Tuesday, Oct. 28


The Domina Prestige St. Petersburg hotel plays host to SPIBA’s Marketing and Communications Committee’s round table discussion on “Government Relations Practices in Russia” this morning. The discussion starts at 9:30 a.m. and participation must be confirmed by Oct. 24.



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