"Do Not Raise Grocery Prices"... Russia Moves to Control Food Prices

Food Companies Successively Freeze or Lower Product Prices
Influence of President Putin's Price-Related Orders
Experts Say "Artificial Price Controls Lead to Product Quality Decline"

[Asia Economy Reporter Naju-seok] Food companies have agreed to restrain price increases under the intervention of the Russian government. The Russian government has stepped in to control prices, citing the difficult household situation caused by the novel coronavirus infection (COVID-19).

According to foreign media on the 16th (local time), Russia's largest food company X5 announced that it would lower prices of pasta, bread, black tea, potatoes, cereals, milk, and preserved beef. Competitor Magnit also promised to freeze or raise product prices only minimally. The announcement of price restraint measures by food companies is largely influenced by the intervention of the Russian government.

Recently, when Russian President Vladimir Putin raised concerns about price increases of daily necessities, the Russian government took measures such as temporarily restricting price hikes on sugar and sunflower oil. Russian Prime Minister Mikhail Mishustin stated, "If socially important goods increase by 10% within two months, we will regulate prices." This included restrictions on grain exports, subsidies to flour and bread manufacturers, and export restrictions on sunflower oil.

Scenery of Moscow, Russia
[Photo by Yonhap News]

Earlier, President Putin also instructed measures related to water. On the 13th, Putin pointed out on TV, "Unemployment is rising and household income is decreasing, but daily necessities are becoming more expensive."

Looking at official Russian prices, butter increased by 79%, sugar by 71.5%, and frozen fish by 68% compared to a year ago. During the same period, sunflower oil rose by 23.8%, flour by 12.9%, and bread by 6.3%.

The rise in essential goods prices appears to reflect reduced production, increased grain exports such as wheat, and seasonal characteristics.

However, experts have raised doubts about the Russian government's policy choice to suppress price increases. One expert warned, "If prices are fixed, producers will lower product quality," adding, "Monitoring prices may help low-income groups, but it will result in a decline in quality of life."

This content was produced with the assistance of AI translation services.