The FAS will analyze pricing in the market of milk powder in the EAEU
"The participants of the meeting considered it appropriate to analyze the pricing in the market with wider geographical boundaries, taking into account the Belarusian enterprises-importers in order to establish different prices for Russian and Belarusian consumers and check their actions for compliance with the provisions of the Treaty on the Eurasian Economic Union, as well as a study on the distribution of imports of these products between Belarusian enterprises in order to check the markets for compliance with the criteria for classifying markets as transboundary", reads the message. The inspection will be carried out next year, reported in the FAS.
As it follows from the report presented by the Control Department of the agro-industrial complex, the market of skim milk powder is currently marked by developed competition. In the market of whole milk powder, the economic concentration is higher. In 2016, the market leader with a share of more than 30% was CJSC Meleuzovsky dairy and canning plant (Bashkiria), in 2017 the share of this economic entity was about 25%.
The message of the Agency indicates that the consumer survey showed that the economic barriers to entry are surmountable. Thus, among the most serious economic obstacles there are noted administrative barriers: the provision of privileges to individual economic entities and the decision of the authorities to restrict the import (export) of goods into the territory (from the territory). About half of the surveyed participants in the milk powder market noted high transport tariffs as a significant obstacle to the development of competition.
"According to the calculations based on the data presented by the market participants, the weighted average level of capacity utilization for the production of skim milk powder and whole milk powder in Russia is not more than 50%. At the same time, the supply of skim milk powder from other countries to the territory of the Russian Federation exceeds the volume of its own production", the report said.
Experts suggested that the restriction of production volumes by Russian producers of milk powder is associated with price competition with imported goods, most of which come from the Republic of Belarus.
An important feature of the market of raw milk, which is adjacent to the markets of skim milk powder and whole milk powder, is seasonality of its production, says the report of the FAS. In summer there is produced more raw milk than in winter. As a result of the decline in the supply of goods on the market prices rise in winter and fall in summer, as the supply may exceed the demand. In summer, due to such fluctuations in production, purchase prices for raw milk may fall by an average of 20-25%.
To reduce the impact of seasonality on the volatility of prices and to maintain a reasonable purchase price for raw milk producers there may be used the mechanism of procurement and commodity interventions for milk powder, butter, cheese and certain types of whole milk products, said in the Department.
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