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MORE ON ARMENIA'S CORRUPT SUPERMARKET ECONOMY
EurasiaNet.org, NY
March 12 2013
March 11, 2013 - 4:36pm, by Yigal Schleifer
Eurasianet corespondent Marianna Grigoryan's recent piece about
hypermarket chain Carrefour's struggle to break into the Armenian
market because of a group of oligarchs' control over the food supply
chain, provided a fascinating glimpse into how rotten politics can
impact the most mundane daily chores, such as shopping and cooking.
Interested in hearing more about this story, I sent Marianna a list
of followup questions. Our exchange is below:
1. What made you think about reporting on this subject?
When nearly six months ago it was announced that Carrefour is coming
to Yerevan, many people were curious to see if that at least will
happen. In Armenia, where in many spheres there is the heavy existence
of monopolies, Carrefour's possible existence became some kind of
question of principa. I was excited, as were many others, to have
Carrefour in Yerevan as a competitive hypermarket next to Yerevan's
existing two or three supermarket networks. But at the other side
speculations started as expected and severak months later there is
still nothing exact - only Carrefour's "Opening soon." So I decided
to write about the situation in light of a story I had already started
about Armenian oligarchs.
2. In general, where do Armenians shop for their food?
In general in Armenia, especially in Yerevan, the biggest network
of supermarkets-hypermarkets is 'Yerevan City,' which belongs to the
pro-government oligarch Samvel Aleksanyan, a member of parliament who
controls sugar, flour and other spheres of food import and dictates
the "prices." For example, officially 99.9 percent of sugar imports
and domestic sales belong to his family. There are also two other
supermarket networks but they have been mostly empty in recent months.
3. Do you think Armenians are looking for the kind of shopping
experience a Carrefour would offer?
Yes, sure. Carrefour can bring new quality, competitive prices, and
new products. Besides, as Carrefour itself imports the products, it
means that hypermarket will be able to get around monopolistic prices.
4. What are the practical implications of the oligarchs influence
for Armenian food shoppers?
Mainly there is an impact on quality and prices. Presently, grains,
flour, and sugar, and recently also meat and even fruit, are obviously
artificially high. For example, because of Samvel Aleksanyan's sugar
monopoly, every shop - even small ones - sell the sugar imported
by him. That means that because of his monopoly he can control the
prices and the quality. The same is in wheat flour market, which is
also controlled mainly by Aleksanyan. As a result, in Armenia we have
high flour prices. For example, as shows a study entitled "Monopolies
in Armenia" by the Hrayr Maroukhian Foundation (HMF), international
wheat price fell by 23 percent during February-March 2011. But what
do we have in Armenia? After Parliamentary elections on May 2011, the
prices on wheat flour increased by almost 30-40 % over the last year.
5. Have Armenian food sellers come up with any creative ways to get
around the influence of the oligarchs on the market?
When food importers are mainly the oligarchs, food sellers cannot
easily win customers over; they simply cannot sell the products for
less than they themselves bought them for.
http://www.eurasianet.org/node/66674
EurasiaNet.org, NY
March 12 2013
March 11, 2013 - 4:36pm, by Yigal Schleifer
Eurasianet corespondent Marianna Grigoryan's recent piece about
hypermarket chain Carrefour's struggle to break into the Armenian
market because of a group of oligarchs' control over the food supply
chain, provided a fascinating glimpse into how rotten politics can
impact the most mundane daily chores, such as shopping and cooking.
Interested in hearing more about this story, I sent Marianna a list
of followup questions. Our exchange is below:
1. What made you think about reporting on this subject?
When nearly six months ago it was announced that Carrefour is coming
to Yerevan, many people were curious to see if that at least will
happen. In Armenia, where in many spheres there is the heavy existence
of monopolies, Carrefour's possible existence became some kind of
question of principa. I was excited, as were many others, to have
Carrefour in Yerevan as a competitive hypermarket next to Yerevan's
existing two or three supermarket networks. But at the other side
speculations started as expected and severak months later there is
still nothing exact - only Carrefour's "Opening soon." So I decided
to write about the situation in light of a story I had already started
about Armenian oligarchs.
2. In general, where do Armenians shop for their food?
In general in Armenia, especially in Yerevan, the biggest network
of supermarkets-hypermarkets is 'Yerevan City,' which belongs to the
pro-government oligarch Samvel Aleksanyan, a member of parliament who
controls sugar, flour and other spheres of food import and dictates
the "prices." For example, officially 99.9 percent of sugar imports
and domestic sales belong to his family. There are also two other
supermarket networks but they have been mostly empty in recent months.
3. Do you think Armenians are looking for the kind of shopping
experience a Carrefour would offer?
Yes, sure. Carrefour can bring new quality, competitive prices, and
new products. Besides, as Carrefour itself imports the products, it
means that hypermarket will be able to get around monopolistic prices.
4. What are the practical implications of the oligarchs influence
for Armenian food shoppers?
Mainly there is an impact on quality and prices. Presently, grains,
flour, and sugar, and recently also meat and even fruit, are obviously
artificially high. For example, because of Samvel Aleksanyan's sugar
monopoly, every shop - even small ones - sell the sugar imported
by him. That means that because of his monopoly he can control the
prices and the quality. The same is in wheat flour market, which is
also controlled mainly by Aleksanyan. As a result, in Armenia we have
high flour prices. For example, as shows a study entitled "Monopolies
in Armenia" by the Hrayr Maroukhian Foundation (HMF), international
wheat price fell by 23 percent during February-March 2011. But what
do we have in Armenia? After Parliamentary elections on May 2011, the
prices on wheat flour increased by almost 30-40 % over the last year.
5. Have Armenian food sellers come up with any creative ways to get
around the influence of the oligarchs on the market?
When food importers are mainly the oligarchs, food sellers cannot
easily win customers over; they simply cannot sell the products for
less than they themselves bought them for.
http://www.eurasianet.org/node/66674