Industry and Trade Ministry seeks to ease restrictions on market share in retail when acquiring foreign chains

MOSCOW. May 4 (Interfax) - Russia's Ministry of Industry and Trade has proposed removing restrictions on the maximum market share for retail chains which will buy foreign companies leaving Russia through January 1, 2023.

The ministry submitted the relevant bill to the Russian government and it could be submitted to the State Duma in the near future, the Vedomosti newspaper reported, citing a ministry representative. The Industry and Trade Ministry press service confirmed the relevant proposals to Interfax.

"The draft is now being elaborated upon by the Russian government and will be submitted to the Russian State Duma for consideration in the very near future. Proposed changes concern removal of restrictions established by article 14 of the law on trade of the maximum market share of 25% for a retail chain which may make a deal to acquire a foreign retail chain leaving the Russian market," the ministry's press service said.

"The bill establishes a clear procedure for the acquisition of a retail chain leaving the Russian market. For this, the buyer must obtain the prior consent of the head of the constituent subject and a positive opinion of the Federal Antimonopoly Service on the proposed transaction," the department said, adding that the purpose of the bill is to "save jobs for employees of retail chains that are leaving the Russian market."

"The introduction of this temporary rule may prevent risks of reduced availability of goods and the loss of jobs created by retail chains leaving the market," the FAS said. "At the same time, the service recalls that in accordance with the law on protection of competition, if a transaction may lead to creation or strengthening of a dominant position of a business entity, it requires the mandatory approval of the FAS," a spokesman for the agency told Interfax.

The proposal of the Ministry of Industry and Trade can be primarily used for the acquisition by retailer X5 Retail Group chain of the Prisma chain of Finnish supermarkets in St. Petersburg, Vedomosti said, citing the opinion of Mikhail Burmistrov, head of Infoline-analytics. Finnish holding S-Group, which manages 16 Prisma supermarkets, announced the decision to terminate all operations in Russia on March 4 on its website, citing "fundamental changes in the business environment", the newspaper said.