Two foremost differences
Certain limits to be introduced for large trading chains countrywide
By Maria Dorokhova
For the majority of people, shops are a part of their daily route from work. People go into a small shop, buy something they need and run home, passing the cool super and hypermarkets where the prices at times are lower, however the gain of personal time is incommensurably more valuable. As for pensioners, who do not hurry, the major principle while choosing a supermarket nearby is convenience. Meanwhile shops, which are ‘close to home’, have been under the threat of disappearance, both practically and hypothetically, for years because of the activity of their chain ‘brethren’. New laws on the state regulation of trade and public catering will dot all ‘i’s.
Perhaps, last year’s restriction of the share of large trading chains became the most disputed and discussed theme in the field of retail trade. The representatives of the big chains considered the suggestion to reduce their share of their market in regions down to 20 percent to be unfairly low. Allegedly, such a proposal would hinder the development of the big companies and lead to the situation where modern formats of trade will not reach many residents of regions, while already existing stores will not be able to offer big discounts because of the impossibility to increase direct deliveries from abroad of, for example, fruits or cereals. The data about the admissible ‘concentration’ in the markets of other countries were used as arguments. Thus, for example, in Russia the threshold value is 25 percent, and the authorities are going increase it further. In Europe and the USA, 80-90 percent of the market is under the authority of chain shops.
However, the Belarusian trading department did not dare to follow this example in such a delicate, and to a certain extent, personal matter. It was decided to use the principle of ‘do not harm’ as the main tactic, having considered that with a 20 percent maximum, it will be possible to avoid monopolies, and to keep local, independent shop availability.
Though the assortment in small shops is smaller than in well-publicised chains, and at times they operate in an old fashioned manner, without the help of ‘super-modern’ programs and apps, they have, nevertheless, products and goods for everyday living. In addition, the most important thing of all — everything is just a step away. If such a shop closes in a particular neighbourhood, the younger residents may not notice. However, for the pensioners, it is hard to go in the city centre, just to buy a loaf of bread.
The new legislation will also stir up local authorities, which should economically stimulate small shops and public catering, so that they may render services to veterans, old people, the disabled and other needy citizens. “We want local authorities, local executive committees to create a preferential approach. Even to include a reduction of rental fees and certain taxes,” said Belarus’ Trade Deputy Minister, Irina Narkevich.
In order that competition between formats will be fair, the law on the state regulation of trade and public catering will forbid large players, in both trade public catering, to force a contracting party to refuse making similar deals with other legal entities or suppliers, regardless of the ‘size’ of competitors. There will also be a restriction on the decrease of the selling price, to the extent that, even after application of mark-up, the cost of goods in a chain will be far from the minimum in the market. Besides, starting in the middle of summer, contracts on deliveries should not contain any ‘sale or return’ clauses.
From their side, state bodies should not interfere with the movement of goods from one region to another, restrict subjects of economic entities on their choice of contracting parties and suppliers or create discrimination conditions while choosing a place for location of stores.
From the end of July, all trade and public catering parties will be obliged to have, and to observe, the product list of goods placed on a visible place for buyers. Soon it will not be co-ordinated with executive committees. The Ministry of Trade will develop the list of production which should be included in it, depending on the type and kind of trading store, presence of trading space and its size. This list will become obligatory. The law also allows for shops or cafes to have the right to sell the goods which are not included in their product list, provided that the conditions of their storage and sale are met.