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Cartel price-rigging plagues Russian wine prices
The price of wine in Russia can be up to ten times more expensive than other European countries, thanks to price-rigging by a cartel of importers.
The allegation came last week from Igor Artemyev, head of the Federal Antimonopoly Service, Russia’s anti-trust buster.
The FAS released a statement on 22 January stating it had started to research the structure of the market of imported bottled grape wine and the conditions for product movement from the importers to the end customer.
However, before this research has been completed, Artemyev has publically bemoaned the fact that a €5 bottle of wine in France could end up costing €150 in Moscow.
Even though Artemyev was comparing the price of a bottle in a wine shop in France with the price in a Moscow restaurant, it is still believed that the wine could end up in Russia with a retail value of €50.
This, according to Artemyev is the result of a “highly concentrated” cartel of importers. Artemyev said: “We want to analyse this market with a view to seeing whether there are cartel agreements and exclusive contracts.
"We believe that importation [of wine] can be much cheaper. Apparently, in this market a cartel arrangement operates, along with the primitive elements of monopoly.”
However, Vadim Drobiz, an employee for the Centre for Research on Federal and Regional Markets for Alcohol argues there is no such issue.
He said: “The FAS is incorrect in their claim that all the importers raise prices too much. The wine market is very diverse. In the cheap imported wine segment [Rb140 to Rb170 a bottle], the importer keeps no more than 20% of the cost price as his profit, and the distributor adds another 20%.
“If the importer is also the distributor, they add over 20%. If the chain is longer, the percent is higher. Let FAS investigate the matter, but the officials themselves are to blame for price growth.”
The FAS poll among the main importers of alcohol products in Russia demonstrated that Russia imports wine from 35 countries. More that 75% of wine is supplied from the countries outside the ‘near abroad’ category while 40% is imported from three European counties – France, Italy and Spain.
Jane Parkinson, 01.02.10