OREANDA-NEWS. October 05, 2010. Adopting the Law “On the Basic Principles of State Regulation of Trade Activities in the Russian Federation” created the legal framework for regulation of retail trade and provided possibilities for adequate reactions to price behavior on retail market, said Stats-Secretary Andrey Tsarikovskiy, Deputy Head of the Federal Antimonopoly Service (FAS Russia), speaking at the workshop “On Competition Issues in Retail Trade”, reported the press-centre of FAS Russia.

“One of the major goals of the Law on Trade was ensuring the balance of rights and interests of retail networks and suppliers and protection of public rights and interests” emphasized Mr. Tsarikovskiy.

Deputy Head of FAS Russia gave detailed comments about the main provisions of the Law on Trade, aimed at developing trade in the Russian Federation and creating competitive environment on retail markets.

“Before the law came into effect, retail networks could dictate anything to product suppliers. Such circumstances required clear distinction between the rights and responsibilities of retail networks and supplies related to conclusion and execution of the contracts for supplies of food products”, explained Mr. Tsarikovskiy.

According to Andrey Tsarikovskiy, development of industry legislation is inseparably connected to compliance with the antimonopoly standards. In particular, Article 13 specifies antimonopoly rules for retail networks and suppliers that prohibit discriminatory conditions, imposing certain conditions upon counteragents and commission agent agreements in wholesale trade. Under the Law on Trade, it is prohibited for a single network to exceed 25% share within the boundaries of a municipality. The Law also allows canceling transactions between retail networks if they exceed the established threshold value.

Establishing the threshold facilitates will create market structure with 3-4 large retail networks and help develop such conditions when competition supports market equilibrium, which will improve goods quality and decrease prices.

Limiting retail network share within municipality boundaries to 25% will encourage investments to development of trade in other regions of the Russian Federation, which will have positive effect upon the level of competition in the Russian Federation as a whole.

Mr. Tsarikovskiy also pointed out that the law contains antimonopoly requirements to the authorities with regard to regulation of trade activities. In particular, the authorities are prohibited to pass acts and exercise actions fixing the rules of trading activities that are different from the rules established by the federal laws.

The workshop participants also discussed the measures adopted by FAS Russia to offset price increase for some food products, including socially important groups of products.