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Large retailers will be able to expand without restrictions

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Large retailers will be able to expand without restrictions


© Igor Samokhvalov/PG

From June 15 to December 31, 2022, retail chains will be able to buy or rent additional square meters, not subject to expansion restrictions, if they enter into a deal with a company controlled by a foreign organization that has announced its withdrawal from the Russian market. This law comes into force on June 15. This should help keep the usual stores in place, their assortment and jobs, according to the State Duma.

Controlled counterparty

According to the law “On the Fundamentals of State Regulation of Trading Activities”, a large retail chain that sold more than 25 percent of all food in the region in monetary terms in the previous year does not have the right to open new stores there. If she violates the ban, the deal is declared void. Both another company and the Federal Antimonopoly Service can file such a lawsuit.

Now there is an exception to this rule. The restriction will not apply if retailers buy or lease retail space from a legal entity controlled by a foreign company. And we are talking about organizations that have stopped trading in Russia or announced their withdrawal from the Russian market.

Another requirement is that the grounds for recognizing a legal entity as controlled by a foreign company should have arisen before June 15. An organization is considered such if the controlling person has the right, directly or indirectly, to dispose of more than 50 percent of the votes attributable to its voting shares or constituting its authorized capital.​ ​

The new rule will be in effect until December 31 this year. Transactions concluded during this period will not be recognized as void.​

After December 31, the share will not be taken

Initially, a law restricting the acquisition of additional space was adopted in order to maintain healthy competition in the market. After all, the excessive monopoly of food retail leads to higher prices, the chairman of the State Duma Committee on Industry and Trade noted in a conversation with Parliamentary Newspaper Vladimir Gutenev.

“And the current limit values, when a company can occupy no more than 25 percent of the market, form a normal competitive environment,” he said.

But now, according to Gutenev, the abolition of existing restrictions by the end of the year is so far the only way to preserve the foreign-owned stores that customers are used to, as well as jobs in them and a familiar assortment. Moreover, in a particular region there can be only one company that is ready to acquire excess space and keep foreign business. According to the deputy, now such a situation has developed in several subjects.

Vladimir Gutenev
© Igor Samokhvalov/PG

Moreover, after December 31, the “extra” share of the business will not be taken away. For example, a company with a 24.95 percent market share in the regional market will acquire an area that will give it another four percent.

“Even for the post-crisis period, these plus four percent in this region will be kept by the company. And this is an honest and correct approach that allows businesses that solve the problems facing our economy to receive preferences. The more the company works for the country, the more carefully the country should treat it,” the parliamentarian believes.

The new law is the correct response to external threats, and that is why the relevant committee supported such an initiative of the Government, the deputy said.

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Is it forever?

More than once there were proposals to go further. For example, during the discussion of the anti-sanction law, there was an idea to increase the maximum share of retail chains in the market from 25 to 35 percent, and indefinitely, Gutenev said.

“We believe that this proposal has the right to be discussed, but not in such a “fire” manner, as we have now adopted amendments to the law on trade, allowing our companies to acquire foreign businesses in excess of the area limit. And already in a planned manner we will discuss such ideas with the involvement of professional associations, the Society for the Protection of Consumer Rights, in order to find a reasonable balance,” the deputy noted.

In addition, according to him, the State Duma has scheduled a meeting for July 7, which will consider the issue of protecting consumer rights from the actions of foreign companies that have ugly left the Russian market. After all, according to him, foreigners leave in different ways – some try, for example, to maintain warranty service for previously sold goods, and some leave their Russian buyers.

Also read about what laws come into force in June.

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