Suppliers Began to Refuse to Sell Sunflower Oil and Sugar to Stores at Prices Set by the Russian Government
OREANDA-NEWS. In December 2020, the Ministry of Agriculture and the Ministry of Industry and Trade signed agreements with some manufacturers and retail chains on the maximum selling price for oil of 95 rubles per liter, and the maximum retail price of 110 rubles per liter. For sugar, the limit prices are set at 36 and 46 rubles per kilogram, respectively.
A source in the retail company told the Russian newspaper «Kommersant», that manufacturers refuse to sell products on such terms. Some of them just ignore requests. Dmitry Shadrin, head of the Coordinating Council of the Russian Union of Independent Retail Networks, confirmed these problems. According to him, small and medium-sized retail chains, as well as non-chain stores, bought butter and sugar from distributors, which are not subject to price agreements. This retail tried to switch to purchasing directly from factories, but manufacturers are primarily ready to serve large chains, and they are ready to work with new customers only after the conclusion of a supply contract, Shadrin explained.
Small chains can't buy enough volumes from suppliers directly to make manufacturers interested in supplying them with goods at federal retail prices, explained a source of newspapper.
General Director of «Infoline-Analytics» Mikhail Burmistrov called the difficulties of small retail expected. Large chains have their own distribution centers and strong logistics, while small retailers can incur large costs for delivering goods to stores. Previously, this was done by distributors, who were not taken into account in the concluded agreements, and manufacturers do not have the ability to provide the desired prices for direct work with small retail, the analyst explained.