September 3, 2010

Government inspects Siberian dairy producer's prices

Russia's Federal Antimonopoly Service searched a Siberian subsidiary of dairy producer Wimm-Bill-Dann, following a raise in the firm's wholesale prices by 11-17.9% whereas production costs grew by 4.5% only.

The service said that it saw no economic reasons for the price rise and accused the company of abusing its dominant position on the market.

"Weekly food price monitoring says the raw milk purchasing price for Wimm-Bill-Dann's subsidiary in Novosibirsk has not changed significantly and amounts to an average of 11-12 rubles (US$0.36-0.39) per litre. The wholesale price for pasteurised milk with a 2.5% fat status increased to 26.4 rubles (US$0.86) from 20 rubles (US$0.65)," the service said.

A hearing on the case is scheduled for September 21.

"If the (Antimonopoly Service's) commission confirms violations, administrative proceedings will be instituted against the offender. Large turnover fines exist," the service said.

The Federal Antimonopoly Service found in August that a Wimm-Bill-Dann subsidiary in Russia's Far East increased its dairy product prices by an average 4% and demanded an explanation. The service said that if Wimm-Bill-Dann did not produce a reasonable answer, it would make checks.