FAS EXPLAINS HOW TO CREATE A “PURCHASING UNION” AND NOT VIOLATE THE ANTIMONOPOLY LEGISLATION

The creation of ”purchasing unions” will allow small retailers to carry out joint purchases to expand the assortment, reduce purchase prices, and as a result, retail prices

The Competition Authority has issued an explanation that describes the possibilities for concluding joint procurement agreements within the framework of the current Law on Protection of Competition. The document was prepared in accordance with the instructions of the Government of the Russian Federation to regulate the activities of “trade and purchasing unions” in the retail markets of food products.

The possibility of joint purchases is relevant, first of all, for small businesses to achieve optimal conditions for purchasing goods from suppliers. If we talk about retail chains, it will allow small retailers to reduce purchasing and, as a result, retail prices.

The explanations prepared by the FAS Russia will be able to clarify for the participants of the commodity markets how and in what manner economic entities are allowed to conclude agreements or create a new legal entity in order to optimize purchases.

So today the following forms of joint purchases are possible: optimization of purchases within one controlled group of persons* by entering into such an agreement, conclusion of a joint activity agreement with the prior consent of the FAS Russia** and unification of independent organizations into one trading network.

The FAS Russia notes that economic entities have the right to apply to the antimonopoly authority on the admissibility of concluding such agreements, which will reduce the risks of violating the antimonopoly legislation.

For reference:

* part 8 of Article 11 of the Law on Protection of Competition

** The procedure is established by Chapter 7 of the Law on Protection of Competition