OREANDA-NEWS. November 12, 2013. Deputy Head of the Department of the Federal Antimonopoly Service (FAS Russia) for Control over Chemical Industry and Agro-Industrial Complex, Irina Epifanova, talked about this at the Round Table of PIA Novosti on “Food Products Prices” Experts Forecasts”.

Although agricultural products markets are competitive, from time to time prices soar, which according to complaints to FAS, is now happening on the egg market. FAS is already carrying out investigations in a number of regions.

“We instructed FAS regional offices to analyze the egg markets and find out where is the highest price growth: at the level of wholesale purchases or retail prices. Wholesale prices at poultry factories currently are at 32-45 RUB per ten eggs. The production costs are at 29-32 RUB. Therefore, factories can hardly break even or need to work with negative profitability, and we must understand what causes the price increase”, commented Irina Epifanova.

FAS expects to make the first conclusions upon the results of the investigations in a month.

According to Rosptitsesoyuz, increased egg prices can be caused by three factors: a growth of prices for combined feed, which form 35% of the egg costs, a seasonal increase and trading mark-ups.

“To prevent unreasonable increase of prices a package of measures is required; in particular, included in the Road Map for “Developing Competition and Improving the Antimonopoly Policy”. They do not directly concern agricultural markets but are related to the adjacent markets that influence them – the market of electric power industry, railway transport, etc.”, added Deputy Head of FAS Department for Control over Chemical Industry and Agro-Industrial Complex.

Apart from the information about the situation on the egg market, Irina Epifanova discussed at the Round Table some aspects of the government regulation: direct state regulation on the market of agricultural products and raw materials and antimonopoly regulation.

“Specific measures of government regulation are encorporated in some legislative acts, for example, the law on the fundamental principles of government regulation of trading activity in the Russian Federation: under Article 8 of the Law the Government of the Russian Federation can restrict trade mark-ups and fix retail prices. This method of direct state regulation has not been used yet, and business community believes that it must not be applied since artificial price freezing will lead to even higher prices. As for antimonopoly regulation, FAS undertakes measures to suppress abusing market dominance in the form of fixing monopolistically high prices, suppress concerted actions between economic entities aimed at fixing and maintaining prices, as well as competition-restricting agreements between executive bodies and economic entities. Only in 2007 when direct state intervention was necessary, the Government allowed such agreements to stabilize and maintain prices for the socially important food products. But it was an exception under the conditions of the economic situation at that time”, summed up Irina Epifanova.