ANDREY TSYGANOV: WHOLESALE MARKETS ARE DEVELOPING, SOME PROCESSES TAKE PLACE THERE AND FAS IS STUDYING THE TRENDS

FAS plans to analyze wholesale markets of tobacco and alcohol products as well as mineral fertilizers

On 11 June 2019, FAS Market Analysis Commission discussed draft Guidelines for analyzing the state of competition on the wholesale markets of tobacco and alcohol products and wholesale trade with mineral fertilizers in the Russian Federation.

It is not the first time that FAS analyses the state of competition and dominance of economic entities on the wholesale markets of tobacco and alcohol products and wholesale trade with mineral fertilizers.

In the study of tobacco market, FAS analyses filter-tipped cigarettes, unfiltered cigarettes and mouth-piece cigarettes, because according to FAS data the supply share of these tobacco products on the federal wholesale market of the total supply on the wholesale market of tobacco products in the Russian Federation sustainably exceeded 98 % for several years. The experts concluded that the sub-market of the remaining types of tobacco products could not exercise a significant effect upon overall development of competition on the wholesale markets of tobacco products. An analytical report submitted to the Commission on the basis of the study findings will describe the level of market development, list the factors that are conducive to competition restriction, identify economic entities that have the dominant position and suggest measures designed to develop competition on the market in question.

As sub-markets of the wholesale market of alcohol, products, the experts consider beer, vodka, grape wines markets and markets of alcohol products with up to 25 % inclusive ethanol v.v. and more than 25 % ethanol v.v. (except vodka).

“Several years ago FAS analyzed wholesale markets of tobacco and alcohol. At the same time, however, certain processes are taking place on each market, particular, mergers and acquisitions, the share of import and the main importers are changing. Therefore it is necessary observe the trends, see what is happening with the market and competition on it”, informed Commission Chairman, Deputy Head of FAS Andrey Tsyganov.

The Guidelines for analyzing wholesale trade with mineral fertilizers are drafted in follow up of the studies carried out by FAS some time ago. The product boundaries of the market are defined as nitrogen, potassium and phosphoric mineral fertilizers.

For the new study, the experts of FAS and the Ministry of Agriculture have chosen 10 regions of the Russian Federation with the highest consumption of mineral fertilizers: Lipetsk, Rostov, Kursk, Omsk, Saratov, Amur regions, Altai, Stavropol, Primorie Territories, and the Republic of Tatarstan. The wholesale markets of mineral fertilizers will be measured in these subjects of the Russian Federation.

“It is also not the first time that FAS analyses the mineral fertilizers market. We intend to find the links in the production-and-distribution chain where the most significant increase of mineral fertilizers prices occurs. Hopefully, the study will identify these links and will allow us to propose the most efficient measures towards developing competition and protect the interests of companies in the agro-industrial complex”,  commented Andrey Tsyganov.