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A new draft law on trade forces retailers to build new stores themselves, rather than rent them
09.09.2011 2404

A new draft law on trade forces retailers to build new stores themselves, rather than rent them

The Federal Antimonopoly Service (FAS) has submitted a second draft amendment to the Law on Trade, which states that retail chains will be able to increase their share in the region to more than 25% only through the construction of new retail facilities. Rental of premises, according to the Federal Antimonopoly Service, is not “organic growth” - too often mergers and acquisitions are masked.

In the first draft amendment to the law “On Trade”, the FAS prohibited any expansion of the trading network if it increased the share of the retailer in the trading entity by more than 25%. Then the project had enough opponents, and it was sent for revision. New amendments are considered “softer”: according to the new project, if the company does not have 25%, then it “has the right to carry out the construction of new retail facilities”, even if with their commissioning its share exceeds 25%.

Most market participants, however, do not see much difference in the new text of the project. In addition, such amendments are opposed by the ministries of economy and industrial trade. The fact is that more than half of new stores are opened on a rental basis, while foreign operators in the format of hyper-supermarkets conduct their own construction.

The newspaper Kommersant cites the words of the executive director of the association of retail companies, Ilya Belonovsky, that retail is embarrassed by the norms relating to development by lease. “The purpose of the amendment is to prohibit M&A transactions, which may lead to an increase in market share over 25%, and allow quiet organic development. But the Federal Antimonopoly Service wants to spell it out in the law in such a way that the main growth driver for retail - leasing - will not be included in the concept of "organic", that is, the implementation of the amendment will be impossible in practice, ”he will explain and hopes that the wording will finally will change. Writes shopandmall site.

The Federal Antimonopoly Service (FAS) has submitted a second draft amendment to the law "On Trade", which states that retail chains will be able to increase their share in the region ...
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