Tangible retail: stores want to ban margins above 15%
The mark-up of retail chains on goods is proposed to be limited to 15 percent. As Izvestia found out, deputies of the Fair Russia faction will submit such a bill to the State Duma on November 6. Now the surcharge can reach up to 300%, which is why prices are rising, the authors of the initiative explain. Business representatives expectedly found the bill unrealistic: at the Central Bank's rate of 16.5%, trading companies take out loans and are forced to shift their costs to customers through margins as the main way to make a profit. In addition, no one canceled utility bills, rent, or employee salaries. Experts fear that the measure will significantly reduce the income of retail chains and may eventually lead to shortages. Izvestia assessed whether the initiative has any chances of becoming a law.
Why do they want to limit the margin
They want to limit the marginal margin of retail chains on goods supplied to them by manufacturers to 15%. Such a bill with amendments to the law "On the Basics of State Regulation of Trade activities in the Russian Federation" will be submitted to the State Duma on November 6 by deputies of the Fair Russia faction headed by Sergey Mironov. In the explanatory note to the document (Izvestia has it) It is reported that it has been prepared in accordance with the decree and instructions of the president, including to stabilize the cost of food products.
"The price increase is due to a number of reasons. At the same time, one of the key factors is the deliberate overestimation of individual retail chains. According to various studies and investigative journalism, the mark—up on goods (the difference between the purchase and retail value for consumers) ranges from 10% for socially significant goods to 200% and even 300% for non-food and individual food products," the document says.
The authors of the initiative remind that the FAS of Russia regularly identifies unjustified price increases, including for such important products as bread. In the fall of 2024, the antimonopoly service established a one hundred percent overestimation of bread prices in retail. Earlier, Izvestia wrote about a significant gap in wholesale and retail sales of fish, potatoes and grain.
Since 2010, Russia has been operating a temporary price restriction mechanism for socially important goods, which is regulated by Decree of the Government of the Russian Federation No. 530. According to the document, the authorities can impose maximum retail prices for a limited period of time or limit margins on socially significant products (24 items). The Cabinet of Ministers can make such a decision with a jump of 10% or more in 60 days. However, such a mechanism is rarely used. Back in 2022, the government was recommended to consider limiting trade margins on essential products in the amount of 10-15%. The recommendation was adopted by the State Duma following a government hour with the head of the Ministry of Agriculture Dmitry Patrushev. But the agency rejected this proposal, considering that additional restrictions from the state could destabilize the economy, deprive producers and sellers of an incentive to develop business, lead to lower taxes and shortages of goods.
The explanatory note notes that the margin allows trading to steadily increase profits. For example, X5 Retail Group (which manages the Pyaterochka, Perekrestok and Chizhik chains) increased revenue by more than 24% in 2024, to 3.9 trillion rubles, and net profit by 22%, to 110 billion rubles. The Lenta network increased revenue by 44%, to 888 billion rubles, and net profit to 24 billion (against a loss of 2 billion rubles in 2023).
In this regard, it is proposed to establish that the marginal margin of retail chains on goods cannot exceed 15%. In addition, sellers must indicate the cost of their products on the price tags.
"Such measures will help solve the problem of unjustified and sometimes speculative price gouging, as well as help reduce food inflation nationwide," Sergei Mironov explained to Izvestia.
Another block of amendments in the bill concerns the preparation of food directly in retail facilities.
"The current sanitary and epidemiological rules and regulations of the Russian Federation formally allow the storage and sale of ready-made culinary products in an open form on shelves and showcases. However, practice shows that such conditions can contribute to an increased risk of food contamination and, as a result, an increase in cases of acute intestinal infections among the population," the document says.
As an example, the deputies cite the recent mass poisoning with shawarma, which was sold in the stores of the Nikolaevsky retail chain in Buryatia, where 145 people were injured.
In this regard, the authors of the initiative propose to ban the preparation of culinary products directly in retail facilities, as well as to prevent the use of products with a remaining shelf life of less than 24 hours for cooking food intended for retail sale.
The bill also provides for measures to protect the interests of suppliers. In particular, it is proposed to limit the deferral of payments by retail chains, as well as to establish a requirement that at least 25% of the assortment should be made up of products from local manufacturers. Retail chains, replacing local stores, as a rule, continue to work with large federal suppliers. As a result, local producers are forced to reduce production or shut down altogether, the authors of the initiative explain the need for innovations.
The press service of the Ministry of Industry and Trade informed Izvestia that the bill had not been submitted to the ministry. They stressed that if it is received, the document will be reviewed in accordance with the established procedure.
The editorial board sent a request to the FAS with a request to comment on the prospects for supporting the initiative.
Pros and cons of limiting margins
The Association of Retail Trade Companies told Izvestia that they had not seen the bill, so they would not be able to comment on it.
Alexander Kalinin, head of the Opora Russia NGO, believes that the initiative is unrealizable at the Central Bank's rate of 16.5%, given that trading companies also take out loans and pass their costs on to customers through margins as the main way to make a profit.
— Firstly, it is unclear from the draft law who will monitor and control this margin. Secondly, it seems to me that this is an unrealistic initiative at all, if our current rate is 16.5%, and business loans are even more expensive. The same trade takes them today at 18%. How can she continue to work if such a bill is passed? — he noted.
According to him, this bill is not economically calculated. Such proposals are possible only in case of low inflation, the business representative believes.
Georgy Ostapkovich, Research Director of the HSE Center for Economic Research and Economic Analysis, noted that theoretically it is even possible to freeze prices, and developed countries allow this, but for a certain period: two to three months.
— If you do this on an ongoing basis, prices will not rise for a while, but then there may be a shortage, as it will be unprofitable for trade to operate at a loss. After all, objectively, a business has costs that need to be covered. These include utility bills, rent, employee salaries, and logistics costs," the expert believes.
According to him, prices should be regulated by the market, otherwise it is necessary to revive the State Planning Committee and change the economy.
This opinion is shared by the head of the public council at Rospotrebnadzor Oleg Pavlov. He believes that price control methods should not be so total.
"In a market economy, the transition to total control over pricing in such a massive segment as retail chains seems unnecessary, since it is obvious that freedom of entrepreneurial activity presupposes a certain freedom of pricing," the social activist explained.
It is necessary to protect the interests of consumers in terms of price control, but such mechanisms already exist. For example, the FAS, together with other agencies, constantly monitors the cost of socially important goods, Oleg Pavlov recalled. In his opinion, if prices for all goods are regulated, this can lead to shortages and speculation, so that consumers will suffer in the end.
Dmitry Leonov, Deputy Chairman of the Board of the Rusprodsoyuz association, did not comment on the issue of margins, but expressed his opinion on another part of the bill.
— Cooking in retail chains is an effective and safe way to minimize losses and increase the turnover of goods with an approaching deadline. With proper monitoring, compliance with sanitary standards and informing consumers about the shelf life of ready—made food, this does not pose a security threat," the business representative explained.
According to him, the ban on the use of expired products for cooking will increase the volume of disposal of edible food.
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