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  • More On Armenia's Corrupt Supermarket Economy

    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

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