Armenian Regulators To Investigate Sugar Price Hike
24.08.2011 Naira Bulghadarian
Armenian state regulators on Wednesday pledged to investigate a more than 20 percent surge in the retail prices of sugar which will further raise the cost of life in the country and could hamper government efforts to curb inflation.
The State Commission on the Protection of Economic Competition (SCPEC) demanded formal explanations from the Aleks-Grig company that enjoys a virtually monopoly on sugar imports to Armenia.
“They have to provide all the documents about the price at which they purchased the sugar abroad, the manufacturing country, the customs rates applied to it and the price at which the sugar is sold to local shops,” SCPEC spokeswoman Gayane Sahakian told RFE/RL’s Armenian service (Azatutyun.am).
One kilogram of sugar cost an average of 440 drams ($1.2) in supermarkets and food stores across Yerevan on Wednesday, up from roughly 350 drams recorded just two days ago.
Samvel Aleksanian, a wealthy businessman who owns Aleks-Grig, was reported on Tuesday to blame external factors for the price hike. He said the cost of the foodstuff has soared in the international commodity markets this year.
Sahakian said Aleks-Grig will have to prove this in writing in the next ten days. The SPEC will then look into those documents and decide whether the company has violated Armenia’s anti-trust law and regulations, she said.
The price rise will be primarily felt by socially vulnerable groups of the population. They have already been hit hard by a significant increase in consumer price inflation observed since 2009.
“Sugar sales have already gone down a lot as people don’t have money,” said one shopkeeper in Yerevan.
In a recent interview with RFE/RL’s Armenian service, Prime Minister Tigran Sarkisian acknowledged that the higher inflation rates result not only from objective factors but also from a lack of competition in imports of basic foodstuffs, fuel and other commodities.
The lucrative imports are controlled by Aleks-Grig and a handful of other companies belonging to government-linked entrepreneurs. Sarkisian has repeatedly pledged to do away with these “oligopolies.”
Earlier this year, the Armenian parliament approved a government bill giving more powers to the SCPEC and considerably increasing financial penalties for unfair business competition.
Armenia’s heavy dependence on sugar imports was supposed to end with the construction by Aleksanian of a sugar refinery in the northwestern Shirak that was completed in late 2009. The tycoon claimed to have invested about $100 million in the modern facility inspected by President Serzh Sarkisian last year. It is not clear if the plant operates at present.