Russian ministry proposes fixing price range for "borsch basket" vegetables in supplies to retailers
MOSCOW. June 11 (Interfax) - Russia's Industry and Trade Ministry has proposed to stabilize prices for "borsch basket" vegetables by having suppliers and retail chains enter into long-term contracts that stipulate minimum and maximum prices, Deputy Industry and Trade Minister Roman Chekushov said in an interview with Rossiyskaya Gazeta.
"We have worked out proposals for a transition to long-term contracts between suppliers and chains with a fixed price range for borsch basket vegetables, with the future possibility of extension to other categories of goods," Chekushov said, adding that the "issue requires discussion."
It is "impossible to set one single price for the whole year," but "if we stipulate a price range, designating the minimum and maximum wholesale price for the good that the producer will be obligated to stay within in the course of the year for a guaranteed amount of deliveries, this will be attractive for both the supplier and the retailer," he said.
"Retailers will be supplied with the good in the required amount and for a price that makes it possible to maintain stable end prices for the consumer. For the producer, in turn, it is important to understand that he is assured orders for the year and the amount that he produces will always be taken from him," Chekushov said.
Minimum wholesale prices must assure the producer a "decent profit margin in any region where this good is created or grown," he said.
The ministry believes this mechanism "will make it possible to eliminate significant price fluctuations and producers going into the red."
Chekushov added that the ministry does not see any reason at the moment to introduce price regulation for certain goods.
The Federal Statistics Service reported last week that beets have seen the fastest price growth among fruits and vegetables since the start of this year, with prices surging 63%. Potatoes followed with price growth of almost 60%. Prices also jumped 49.8% for cabbage, 44.3% for carrots and 38.5% for onions.
