OREANDA-NEWS. December 12, 2013. In the past two months the Federal Antimonopoly Service (FAS Russia) received numerous complaints and enquiries from the population as to why eggs became more expensive. In many provinces wholesale ex-works prices increased by more than twofold in October – November 2013 in comparison with the minimum prices in June-July, particularly, in the Astrakhan, Ryazan, Lipetsk and Kirov regions.

The Head of FAS Department for Control over Chemical Industry and Agro-Industrial Complex, Anna Mirochinenko, gave an answerer at a press-conference.

An analysis of pricing in the regional egg markets showed that increased wholesale ex-works prices in the subject of the Russian Federation were caused primarily by the seasonal factor (the growth of consumption and prices on this market reaches its maximum by October – November), and by increased costs of production and sale of chicken eggs”, said Anna Mirochinenko. “Increased egg costs, in its turn, are related to growing tariffs for gas and electric power, increased costs of forage and feed additives that are accounted for 50 - 70 % of the costs structure, as well as increased purchasing prices for breed eggs and breed one-day-old young stock”.

Analysis of financial performance of economic entities involved in production and sale of chicken eggs, carried out by regional FAS Offices, showed that in the 9 months of 2013 in the majority of the subjects of the Russian Federation their operations were loss-making. The level of positive return observed for some economic entities did not even exceed 10 %.

According to Anna Mirochinenko, the preliminary analysis of pricing on the egg market and actions of economic entities that produce and sell eggs does not afford grounds for applying antimonopoly remedies. According to the information obtained by FAS, only Ivanovo OFAS and Bashkiria OFAS opened cases upon signs of fixing and maintaining egg prices: economic entities in these regions are suspected of forming cartels.

“However”, emphasized Anna Mirochinenko, “in a number of Russian provinces additional inspections of economic entities will take place, particularly, in the Ryazan and Astrakhan regions, the Udmurtia Republic, St Petersburg, Zabaikalie region and other subjects of the Russian Federation”.

FAS also did not reveal violations of the antimonopoly law by trading companies. Increased wholesale ex-works prices, albeit a certain lag, are directly translated by retailers, which is the main reason of growing retail prices for eggs. Trading companies, however, chose different strategies of market conduct: increasing wholesale prices some of them reduce a mark-up; others maintain it at the same level. In the majority of the subjects of the Russian Federation average mark-ups fixed by trading companies do not exceed 20%. In the meantime, eggs different mark-ups can be fixed in the same outlet for different categories (from minus to 30 %).

“These are just preliminary data on 45 regions of the Russian Federation. Market analysis continues”, summed up Anna Mirochinenko.