The Federal Antimonopoly Service (FAS) can suggest to restrict the retail margin. Natalia Shagaida, Head of Agrarian Department of the Gaidar Institute, said that administrative interference can trigger unexpected effects. The expert’s opinion was published by ”Agroinvestor.”

“I assume, the best way to regulate prices is a competition and transparent relations between the supplier and the retail network not only for these two participants, but also for other interested parties,” commented Natalia Shagaida.

She believes that currently trade can “play” with margins, setting them at a relatively low level for some goods and high for others. It depends on many reasons: whether the product is socially significant and whether the state monitors its price; how perishable the product is and even on its price. For example, a high markup may be imposed on a cheap product, since even afterwards, it  remains relatively cheap and will be bought in any case. Establishing a marginal mark-up may lead to refusal of retailers to sell certain products, she said.

 “The consumer will suffer. Moreover, there are many opportunities to reduce the margin by shifting risks or additional responsibilities to the supplier. Will the state really control the requirements for the supplier? Restrictions always stimulate the search for their circumvention,” Natalia Shagaida believes.