Retail networks are suspected of potato Russophobia

The Union of Vegetable Producers of Russia complained to the Ministry of Agriculture on retail chains refusing to buy Russian unpacked and unwashed potatoes.
 According to him, in spring and summer retailers prefer to trade in imports, citing poor quality of local products. Because of this, manufacturers can lose about 6 billion rubles. in year. At the same time, companies invested heavily in new storage facilities, hoping to expand their presence in stores, indignant market participants.

The fact that the largest retail chains stopped buying Russian unwashed unpacked potatoes, the National Fruit and Vegetable Union informed the Ministry of Agriculture last week. In a letter addressed to Deputy Minister Yevgeny Nepoklonov (a copy is from Kommersant), it is said that the products are absent in the networks Pyaterochka, Perekrestok, Karusel (all members of the X5 Retail Group), Lenta stores and Billa. "Pyaterochka, in particular, in April, announced the closure of the position, which supplied Russian unwashed, unpacked potatoes, the union said. Today, these products represent products from Azerbaijan, Egypt and Israel, the letter says. The head of the Vegetables division of the agroholding "AFG National" Valery Maslanov confirmed that in April-May the company faced the unwillingness of large retail chains to accept unwashed and unpacked potatoes for sale.

According to the union, the refusal to purchase the network is explained by the low quality of the products. The problem with the spoilage of Russian potatoes by the end of spring and the arrival of a new crop in the middle of summer existed in previous years due to the shortage of modern storage facilities, the executive director of the fruit and vegetable union, Mikhail Glushkov, admits. However, now the situation has changed dramatically, he asserts: "Since 2015, modern storage facilities have been built for more than 500 thousand tons, but retailers do not want to buy Russian products, switching to imports as a matter of habit."

According to the Union, in 2017, Russia introduced storage capacity of 126.8 thousand tons. Approximate volume of investments in their construction there is estimated at 2.5 billion rubles.

A spokesman for the X5 said that Russian potatoes accounted for about 90% of sales in the company's stores for most of the year. The purchase of imported potatoes becomes relevant from April to July in connection with the natural and climatic conditions of our country, he said. In the "Lenta" and Billa comments are not provided.

Meanwhile, indignant in the union, the actions of the networks are damaging the Russian potato market. According to him, in 2017 from April 30 to the end of July 365 thousand tons of the product were imported to Russia. Based on the average wholesale price of 16.55 rubles. for 1 kg, the possible losses of Russian producers from network limitations can be estimated at 6 billion rubles. According to Mr. Maslanov, AFG National annually supplies about 30 thousand tons of potatoes to trade networks, about 50% of this volume is shipped in unwashed and unpacked form. From restrictions, producers specializing in the production of dirty potatoes, especially those that did not invest in expensive storage systems, may be particularly affected, the top manager points out.

The union adds that, in addition to damaging manufacturers, networks also violate antitrust laws and deprive consumers of the choice of products in an affordable price segment. Market participants ask Evgenia Nepoklonov to help ensure that Russian potatoes can access online stores and not allow competition to be restricted.

The Federal Antimonopoly Service (FAS) did not respond to a request from Kommersant. The Ministry of Agriculture stated that they share the concern of the union, this issue is planned to be discussed at a meeting with the participation of the Ministry of Industry and Trade, the Association of Retail Companies and the Union of Independent Networks. Following the meeting, a decision will be made on the expediency of applying to the FAS, the representative of the Ministry of Agriculture said.

According to Konstantin Khanin, a lawyer with the legal department of Heads Consulting, the fruit and vegetable union hints at the collusion of the largest networks in order to prevent the sale of goods, which threatens the participants of the collusion with a turnaround fine (up to 15% of the proceeds). But, he notes, it is extremely difficult to prove the coordination of network activities: cartel agreements are not documented.