Comments made by lawyer Evgeniya Evdokimova regarding an article by “RBK daily” entitled “Federal Antimonopoly Service initiated proceedings against the major supplier of groats”

19 January 2011

The St.-Petersburg Department of the Federal Antimonopoly Service commenced lawsuit against Angstrom, the major supplier of packed groats. The anti-monopoly authority suspects the company of having attempted to influence the prices for their goods established by retailers. Until then FAS has mainly initiated proceedings against sellers of foodstuffs and even has established a fact of concerted actions exercised by retail chains when fixing prices for buckwheat and other groats.

The Department of the Federal Antimonopoly Service reported that during inspection of Angstrom LLC some signs of an antitrust offense were detected, namely, signs indicative of the company have coordinated activities of players at retail market by giving them “recommendations” on fixing consumer prices for goods of Angstrom LLC. The hearing of this case is scheduled on January, 31.

It is not a first lawsuit initiated by FAS against Angstrom, reminded Igor Strelnikov, Director General of the company. In particular, in last September the Krasnodar Department of the Federal Antimonopoly Service has initiated lawsuit on antitrust offense regarding suppliers which were overpricing buckwheat groats. Angstrom was one of the participants in this case. As a result of judgement, FAS renounced their claim to the company, Mr. Strelnikov pointed out. “In this case we hope for the same outcome as well”, — he added.

Over the last half-year, amid rising prices for grain, groats and other socially important goods, the antimonopoly authorities often initiate proceedings against retailers and suppliers of these goods, said Tatyana Bobrovskaya, the analyst of “Metropol”. Sure, there are some instances where unfair behavior of market players is present, however, the price surge is caused by objective reasons, i. e., drought and subsequent crop failure, she said.

In September the St.-Petersburg Department of the Federal Antimonopoly Service commenced a suit against the city retail networks, which, according to the antimonopoly authority, were taking concerted action when fixing prices for buckwheat groats. Similar proceedings were initiated regarding raise in the price for wheat flour. According to legal investigation results, FAS has found that retailers exercised concerted actions. On Monday the St. Petersburg Prosecutor's Office, following the results of an inspection carried out together with Department of the Federal Antimonopoly Service, gave warning to directors of retail networks so as to avoid such offences from now on.

“Companies often succeed in making the court invalidate decisions taken by antimonopoly authorities, despite FAS being initially sure they were right”, — said Evgenia Evdokimova, lawyer in the law firm S&K Vertical. She believes that, in some situations, is rather difficult to prove that, e. g. a company has abused its leading position in the market. “Any evidence produced by antimonopoly authorities is often deemed unconvincing and insufficient by court”, — said Mrs. Evdokimova.

According to Petrostat, over 11 months of 2010 the foodstuff prices in St.-Petersburg increased by 12.6 %. This being said, over the whole 2009 the foodstuff prices in the city went up 7 %.

Nadejda Edina

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