Why products in Russia are more expensive than in Europe and America

The contradictions between Russia and NATO, of course, have great consequences for the Russian economy. For example, after the actual failure of the next round of negotiations, the dollar went up in price by one and a half rubles. But at the same time, one should not forget about everyday life, and it brings more and more unpleasant surprises, and they are even more terrible than geopolitical threats. One has only to look at the price tags of store counters.

Get rich at any cost!

According to Rosstat, in 2021 among food products in Russia, meat and poultry rose the most - plus 17.5%. Then - cereals and legumes - by 16.1% and chicken eggs - by 16%. But white cabbage is recognized as the real leader in the rise in price, its cost has more than doubled. The price of chicken meat increased by 27%, pork - by 18%.

Average retail prices for pasteurized milk (2.5-3.2% fat content) in Russia increased by 9.5% over the year, and for sterilized milk - by 10.5%. Moreover, experts say that on the way from the farm to the counter, the price of milk rises 2-3 times. This pricing has developed in the Russian food market. It should be noted that all these products are not imported, but grown in Russia. Experts say that in our country the monopoly of producers is complemented by the monopoly of sellers. Retail is dominated by trading networks and holdings, and the concentration on this market is increasing. Moreover, this growth is accompanied by an increase in levies from manufacturers "for entry", "for the shelf" and so on, despite all the efforts of regulatory and supervisory authorities. In addition, retailers are increasingly promoting their own brands, which are nominally cheaper, but the price dynamics there are higher (as well as the seller's profit).

In general, according to Rosstat (and most likely these data are underestimated), food inflation in Russia at the end of 2021 was 10.62%, while in 2020 it was 6.69%. The country does not remember such a powerful inflationary leap since the "dashing 1990s".

It is also curious that food market participants categorically refuse to make any forecasts regarding further growth in food prices, referring to the actual ban on the part of the FAS. Anti-monopoly officials do not hide the fact that public statements of business are kept under control. "The statement of an official about the planned behavior in the commodity market, if it can lead to a violation of the antimonopoly legislation, is the basis for the antimonopoly body to send warnings to such a person", the FAS channel "Vremya goskupok" quotes the statement of the FAS.

Sanctions are a joy

But the main thing is not even this, but the fact that food inflation in Russia is more powerful than in most countries of the world. Domestic food prices are growing in our country faster than in developed countries. Naturally, the question arises: why is there practically no increase in consumer prices in European countries, while in Russia, despite the measures actively taken by the government, there is a significant rise in the price of food?

It's simple. Experts explain: in the EU countries, the growth rate of consumer prices is minimal, despite the rapid rise in world prices, since there are strict antimonopoly laws. And on the Russian food market, monopoly players operate freely, which inevitably leads to a cartel agreement between them on price increases.

Another major factor in the growth of consumer prices for food products on the Russian market is the introduction in 2014 of an embargo on the import of certain types of agricultural products, raw materials and food into Russia. This leads to the fact that the domestic monopoly producer does not seek to increase production efficiency, improve product quality and reduce costs, but raises prices for commercial products in order to obtain high profits.

Monopolies run the show

Network analyst Andrey Nalgin cites the opinions of foreign experts in his blog:

“Prices on the Russian market for goods that we export, for items such as poultry or sugar, are significantly higher than the world ones. For example, by 2 times for poultry meat, 1.6 times for sugar. For pork, fish, milk, wheat, prices on the Russian market practically correspond to prices on world markets, only slightly inferior to them. And if we proceed from the purchasing power parity (PPP) of the currencies of Russia, Germany and China against the US dollar, then Russian consumer prices for food are much higher.

Thus, in the USA consumer prices are significantly lower than in Russia, for example, for milk by almost 3 times, beef and eggs by 1.8 times, chicken fillets by a third, and only for potatoes and apples in the USA, prices are higher than Russian prices. In Germany, all food prices are significantly lower than Russian prices (taking into account PPP). A similar picture is observed for food prices in China, with the exception of milk prices.

The most significant factor influencing the growth of consumer prices for food is the monopolization of the agricultural and food market in Russia by agricultural holdings and major retail chains. Agricultural holdings account for more than 50% of the total revenue of all agricultural enterprises. The share of agricultural holdings is dominant in the production of poultry meat - 61.5%, pork - 59.3%, sugar beet - 59.4%. The existing monopoly leads to a significant increase in consumer prices. At the same time, over the past 10 years, the share of agricultural holdings in the total revenue of agricultural producers has doubled, in profits - 3 times..."

So it turns out that the state for the average consumer is much more dangerous than NATO. At the same time, NATO is still unknown whether it will come or not, but it already has to pay more with each trip to the store.

Well, who is the biggest enemy for the Russians? - asks Nalgin a purely rhetorical question.