Metro Russia

FAS Russia confirmed it was investigating Metro Cash & Carry

Russia's Federal Anti-monopoly Office (FAS Russia) has confirmed it is talking to suppliers about contracts they have with retailers in the country, and that it plans to conduct a major investigation into the retailers' operations during the second half of 2010.

According to the group, which has published a press release about the investigation on its website, German-owned group Metro Cash & Carry is among the list of companies being investigated.

In the meantime, FAS Russia said it would inspect any new contracts signed by retail chains with their suppliers in February and March 2010.

Food retailers operating in Russia have come under greater scrutiny since the start of February after a new law was introduced to tighten controls on their contractual and financial dealings with suppliers.

In particular, the regulations require retail companies to pay for perishable items including fresh fruit and vegetables within a certain period.

FAS Russia's deputy head Andrey Kashevarov told reporters that any agreements concluded after the law was introduced on 1 February 2010 but still in breach of the new rules would be subject to penalties.

'We will react, without any delay, to how the Law on Trading, which came into force on 1 February 2010, is observed. Even though penal sanctions for non-compliance have not been improved yet,' he said. 'Now there is a transitional period, during which retail chains can adjust their contracts to comply with the new law.'

According to Mr Kashevarov, FAS Russia received complaints from suppliers about retailers imposing disadvantageous contract conditions between 2008 and 2010, and confirmed that the agency is currently inspecting the Metro Cash & Carry retail chain.

Mr Kashevarov also outlined plans to conduct countrywide inspections of retail chains across Russia during the second half of this year. In the meantime, the organisation will carry out an anonymous survey of suppliers 'to find out how their relationship with retail chains has changed'.

On 12 March, FAS Russia engaged in the latest round of discussions about developing a means to calculate the market share of retail chains in the country.

'We are getting close to forwarding the draft procedures, agreed upon with the Ministry of Industry and Commerce and the Ministry of Economic Development, to the Ministry of Justice for registration,' Mr Kashevarov said. 'In any case, the market will get ready-to-use procedures by the time the statutory norm comes into force.'

Companies can either calculate their share independently or ask FAS Russia to provide a preliminary calculation, he insisted.

'There will be no mandatory requirement to approach FAS Russia in order to get preliminary calculations of the companies' shares,' he said. 'It will only be done if preferred by a retail chain.'

Retail operators still have six months from 1 February in which to renegotiate contracts with their suppliers based on the new rules.

FRESH2010 St Petersburg Russia 13-15 April 2010