Russian dairy producers will be fined if they are found to beprice gouging, following a recent scandal over excessive prices for dairy products, the Federal Antimonopoly Service's (FAS) managing director Teymuraz Kharitonashvili told a Russian business daily on Friday.
On Thursday, Russian President Dmitry Medvedev inspected several agricultural cooperatives in south Russia and was told that intermediaries bought milk from farmers for 11.5 rubles per liter and sold it in retail stores for 32 rubles (approximately $1).
"So, the farmers get 30% of the price and the intermediaries - about 70%," Medvedev said, asking Russian Agriculture Minister Yelena Skrynnik to take appropriate measures to regulate the discrepancy.
The executive director for the Russian Union of Dairy Enterprises, Vladimir Labinov, said the price of dairy products for the end consumer is calculated starting from the farmers providing raw milk (40%), followed by producers (26-28%), and finally the distributors and purveyors (32-34%).
Seventh Continent, one of Russia's biggest food retailers, scrapped contracts on deliveries from Danone and Unimilk dairy producers due to a large one-time increase in their prices.
Vedomosti daily, citing Kharitonashvili, said that FAS intends to put a 1.5%-revenue fine on the dairy producers for the unjustified price hikes.
The dairy producers claim the price increases were justified since they had to pay for packing, logistics, and distribution as well as the increased price for raw milk.
The government has the ability to influence prices by setting a ceiling for essential goods in a region that has hiked prices by 30%, but this measure had not been discussed yet, the deputy Trade Minister, Andrei Dementyev told Vedomosti.
The scientific director of the Higher School of Economics, Yevgeny Yasin, said natural disasters usually cause food price hikes. Direct controls on prices would only aggravate the situation, he said.
The price of agricultural products could become a vital issue for the Russian economy following a scorching heat wave which has gripped much of European Russia since mid-June, coupled with the worst drought since the 1970s.
MOSCOW, August 13 (RIA Novosti)
