Russian Industry and Trade Ministry proposes extending practice of long-term product supply agreements to marketplaces

MOSCOW. Nov 12 (Interfax) - A proposal for retailers and manufacturers to enter into long-term agreements to supply of staple foods could also affect online platforms.

The Russian Industry and Trade Ministry has come up with this initiative, the ministry's head, Anton Alikhanov, said.

"We propose extending the requirements of the draft law on long-term contracts to online players, including marketplaces. We are counting on your support for this initiative," he said, addressing State Duma deputies during government hour.

Russian Agriculture Minister Oksana Lut unveiled plans to introduce long-term agreements with a price formula during government hour. "We view broadening the practice of long-term contracts between producers and retail chains, using a price formula mechanism for vegetables and a number of other products, as an important task. We believe that the corresponding amendments to the trade law, which we are currently working on with the Industry and Trade Ministry, will help prevent price hikes for selected certain food product groups," she said.

Deputy Industry Minister Roman Chekushov said at the end of October that agricultural producers and retail chains were already entering into long-term contracts, without waiting for special regulation to be introduced. "The amount of such contracts is fairly large. But such contracts are largely of a framework nature, and the initiative being discussed is intended to change this," Chekushov said.

"We are doing this work together with the Agriculture Ministry of the Russian Federation, State Duma deputies and the industry community. We have now agreed that we need to set requirements for long-term contracts on key types of products, where it is necessary to ensure the absence of significant jumps in prices," Chekushov said.

"The option we proposed is a price range. Colleagues from the Agriculture Ministry are proposing to consider the possibility of fixing or setting a formula for prices in long-term contracts based on mutual agreements between the supplier and the buyer," he said, adding that expert discussions are now being held.

"We're not forcing this issue, since in the past few months, since May, we're not seeing high inflation for the consumer basket," Chekushov said.