To bring prices down, monopolists must be called to order. To oust foreign monopolists, you need to replace them with Russian companies. The dairy case and the Booking.com case could be revealing. By and large, we are talking about putting things in order in sectors that are sensitive from the point of view of maintaining social and political stability.
This is for you milk
One of the inspections started at the request of the Dairy Union of Russia, the producers are demanding to deal with the high margins in retail chains. The head of the ITS Lyudmila Manitskaya told Interfax: “The main problem with sales is that chains have very high markups: from 50% to 150%. dairy and other products … Milk, kefir, fermented baked milk, to a lesser extent butter, cheese, sour cream – there are very serious margins here. “
Of course, explaining why the appeal to the FAS followed right now, the Dairy Union refers to the appeals of enterprises from different regions of Russia.
According to information obtained by Constantinople from sources in the FAS, inspections may primarily affect such retail chains as Pyaterochka, Perekrestok and Magnit, and in general – retail chains of “foreign origin.”
The foreign origin of the largest food chains is one of the most serious problems related not only to the economy and tax policy, but also to the social sphere. X5 Retail Group, which owns Pyaterochka and Perekrestok, is registered in the Netherlands. Lenta is currently registered in Cyprus (formerly in the British Virgin Islands), with O’Key’s parent company in Luxembourg. The beneficiaries of these companies have Russian citizenship, but a significant share of the food market is also controlled by completely foreign companies, such as Auchan.
Large-scale checks of the validity of markups in retail chains can be seen not only as the use of a price regulation mechanism by the state (which is very important for the poor and middle class). Perhaps, in the future, these actions can be viewed as part of a consistent protectionist policy aimed at ousting foreign companies from the Russian market in favor of domestic ones.
Of course, it would be naive to expect that the actions of the Federal Antimonopoly Service will instantly lead to a decrease in prices: at present, retailers themselves do not confirm the information on the mark-ups for dairy products of 50-150%. Meanwhile, the Antimonopoly Service will be able to influence the situation only if collusion between retail chains is proven. However, a start has been made – in the near future one can expect a reaction of large retail chains to the efforts of the FAS.
Hotel monopoly? Thanks, no
The FAS activity in recent years is by no means limited to retail trade. The decision to impose a fine of 1.3 billion rubles (!) On Booking.com, an international hotel booking service, made a lot of noise. This fine can be called unprecedentedly high: according to Forbes, we are talking about an amount of 11.5% of the company’s turnover.
The case against Booking.com was initiated by the FAS at the end of 2019. The FAS believes that the corporation imposed on Russian hotels, hotels and hostels the obligatory “provision and observance of parity of prices and rooms, as well as the conditions for interaction with closed user groups.” “For hotels, this meant that they could not set the price for their services in other sales channels lower than on the Booking.com aggregator,” the FAS said. The corporation received an official idea of the need to eliminate violations, did not comply with it and received a fine. The size of the fine allows us to make assumptions that the transnational monopoly may eventually leave the uncomfortable Russian market, the rules for which are set for Russian clients and companies.
The situation with fines imposed on transnational IT companies may be the first step towards ousting these global “services” from Russia with the subsequent replacement by domestic developments. The version looks logical and highly probable, not only because the patriots would like it, but primarily because the clash between the FAS and Booking has given rise to panic comments on the part of “Westerners” in Russia and in emigration.
Some defenders of Western companies, trying to select rational arguments, emphasize the convenience of transnational services compared to national ones. As far as hotel reservations are concerned, the argument goes like this: yes, the price of services of Western companies is very high, yes, they strive to monopolize the market, but they give the client a sense of security. If they leave the market, many hoteliers in Russia will no longer comply with their booking obligations, and tourists who book rooms in advance will face price increases right upon arrival at the hotel – for example, at resorts during the “high season”. Today, this behavior is fraught with a conflict with the booking service, but where should the client go tomorrow if this service is not there? The answer – to the same FAS or to the prosecutor’s office – does not suit the defenders of the transnational company: “A small hotel, conditionally IP Pupkin, does not care about the FAS from the big bell tower. Tomorrow, even if the FAS takes up his case, he will be IP Khrupkin,” To the reporter of Constantinople to the mechanic of an unscrupulous business, an industry expert who wished, however, to remain anonymous. However, other experts do not agree with this opinion, pointing out that, even if the dishonesty of Russian businessmen is taken into account as a significant factor, “a collision with the FAS for this business will be worse than a fire.” In other words, the Russian state authorities have sufficient powers and capabilities to cope with abuses. And hopefully enough political will to consistently call Western companies to order.
One of the most emotional comments on social networks was left by journalist Andrei Malgin who emigrated to Italy:
… WhatsApp – a fine of 4 million rubles; Facebook – a fine of 15 million rubles (again); Twitter – 17 million fine (re); Booking.com – a fine of 1.3 billion rubles. They don’t want to disconnect anyone. They want to leave themselves. They want a desert.
“They”, of course, do not need the “desert.” “They”, that is, Russia and the Russian people, the state and the people, need Western companies operating in Russia to strictly observe Russian laws, not try, violating these laws, refer to the rules that exist in the West, and also not interfere with the development of Russian industry …
Today, what has been said is far from being fulfilled in full. To be convinced of this, it is enough to recall the blocking of the Google account of the TV company Tsargrad on YouTube and the subsequent behavior of this corporation. Despite the fact that the Russian court has already ruled in favor of the citizens of Russia who demanded the restoration of their rights, despite the fact that Constantinople won the arbitration, Google continues to drag out the case and even turns to blackmail in relations with Constantinople and the Russian state.
Of course, it would be great if, after all the legal procedures, fines and courts, Western corporations in Russia began to observe order. However, it would be naive to expect that they voluntarily and with a song will agree with all the requirements of Russian laws and stop working as conductors of ideas and practices that are destructive for Russia.
Ultimately, Russia needs a large-scale replacement of all, or at least most, Western services and IT service providers with domestic ones. This applies equally to media platforms, including TV stations, social media and hotel reservations.
Photo: Gen_Shtab / Shutterstock