Retail chains fall out of favour

Russian parliament today opens hearings on the retail trade law. The plot is to restrict retail chains and, hopefully, make them move to provinces rather than concentrate in the capitals.

Two bills were submitted to the lawmakers, one by the government and the other, alternative, by the group of the paliament members. Both drafts, however, agree that retailers which control 25% of the local market must be prohibited from acquiring new places for trading.

Earlier it has been suggested to close supermarkets during the night hours, so small shops could have their share of the profitable trading by the impulse goods, first of all, alcohol and tobacco. Although the provisions disappeared from the government’s bill, the one proposed by MPs will allow local authorities to restrict the working hours of big stores.

For some time retail chains have been under pressure. Many companies, Arbat Prestige, Svaznoy, and Eldorado are among them, were severely penalised, and some were sharged with tax evasion. In March 2008 the vice-head of the State Tax Service, Tatyana Shevtsova, mentioned trading companies, both retailers and wholesalers, among those who evade tax most often. ‘Despite growth of import, hypermarket building boom, and expansion of chain stores,’ she said, ‘the inflow of taxes from retailers in 2007 has fallen.’ She promised that retailers will remain in the ‘area of the special attention’.



September 11, 2009