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Food Industry News

AKORT of the law "On Trade": I do not know what happens

Retail Companies Association (AKORT) announced the unpredictable consequences of the new law "On Trade". This was reported by RNS Director of External Relations AKORT Xenia Burdanova.

The ambiguity of reading a number of norms of the new law “On Trade” and the lack of clarification by the state authorities can lead to turbulence in prices, assortment and completeness of food products on retail store shelves.

According to her, due to the need to renegotiate contracts, “certain turbulence may arise in the food market in terms of prices, range and completeness of food products on retail store shelves”.

“AKORT is a little dramatizing and exaggerating the possible consequences,” said Ivan Fedyakov, head of the Infoline analytical agency, without denying that “it is extremely difficult to renegotiate contracts.”

Supplier Problems

Suppliers are also experiencing difficulties with the entry into force of the new law “On Trade”. Initially, the law was aimed at supporting domestic producers, and State Duma deputy Irina Yarovaya, one of the main developers of the amendments, repeatedly spoke about this.

"Many retailers do not change the supply contract, but limit themselves to changing attachments to contracts ... The main question is that they have already calculated the price, but they still write the conditions and it’s not clear how the supplier will live next year," the head of the association of manufacturers and food suppliers Dmitry Vostrikov. In his opinion, “it would be correct to determine the order of cooperation and the terms of contracts, and then recalculate prices.”

Implementation difficulties

Difficulties for suppliers and retailers are also requirements, according to which the maximum amount of bonuses to retailers from suppliers is 5%, including logistics and marketing services. Previously, the aggregate amount of payments could be 10%, it included only payment for the volumes of goods supplied, remuneration for logistics and other services was not regulated.

The authorities, according to ACORT, did not give market participants an explanation, including, “on determining the calculation procedure and accounting periods for the aggregate amount of remuneration and fees for services paid by food suppliers to distribution networks, on the cost constraints of suppliers and their distributors on logistics and promotion of food products.

“At the moment, retailers need to renegotiate more than 20 thousand contracts for the 52 calendar day“ in manual mode, ”Burdanova said. “Many have already switched to the“ clean price ”, without waiting for explanations from regulators,” Vostrikov noted.

X5 Retail Group became one of the first retailers who switched to the “net price”. The company has no difficulty concluding contracts and plans to complete the renegotiation of contracts on time, the retailer's representative told RNS.

"We have about 4 thousands of contracts that need to be re-signed, today about 50% of them are re-signed, the rest must be signed before the end of the year," representative of X5 Retail Group said to RNS, noting that most of the contracts are planned to be concluded before 1 December

История вопроса

Russian President Vladimir Putin signed a new version of the law "On Trade" in early July of this year. The law came into force 10 days after the date of its official publication, according to the regulatory act, the conditions of previously concluded supply contracts and other agreements must be brought in line with the amended before January 1 2017.

In August, the FAS published an explanation of the new law “On Trade”, in which the Ministry noted that the cumulative sum of all payments for remuneration for purchasing a certain amount of food products and for paying for the provision of services for their promotion, preparation, processing, packaging and Logistics should not exceed 5% of the price of purchased goods.

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