The Chairman of the State Commission for the Protection of Economic Competition of RA Mr. Artak Shaboyan spoke about the results of annual activity of RA competition body at the press conference held today, presenting the achievements, works preformed, summary of studies in different sectors as well as tasks and priorities of the Commission.
Our country recorded a significant progress in the field of competition in 2018
According to the assessment of “World Economic Forum” in this year the Republic of Armenia improved its position by 9 points and now ranks the 19th among 140 countries of the world instead of the previous year’s 28th. In this regard, Armenia is the leader among the EAEU member states: Russia occupies the 63rd place, Kazakhstan – 84th, Kyrgyzstan 102th. With this indicator our country exceeds a number of countries in the region, the CIS and Eastern Europe. For example, Georgia ranks the 80th, Lithuania – the 87th, Latvia – the 58th, Slovakia – the 82th, Hungary – the 99th, Moldova – the 119th, Romania – the 94th, Ukraine – the 110th, and Turkey – the 86th. The “Global Competitiveness Report” is international leading source for competition assessment and is the basis in different international platforms for evaluating the overall development indicator and progress of the country. Mr. Shaboyan mentioned that this significant achievement is connected to the most active economic policy, especially the improvement of the business environment, the active investment policy and the elimination of the obstacles: “Certainly, the entrance of new economic entities both exporters and importers into dozens of sectors should also be considered as a positive one after the membership to EAEC, which has brought substantial activity at the market by recording decrease of concentration in the number of sectors.”.
In some cases, even the shares of economic entities having dominant position decreased several times in the result of competition
The Commission conducted numerous studies to find out what kind of situation is in a number of socially important markets due to entry of new economic entities. Thus, if 24 economic entities were operated in the butter product market in 2014, then according to the data of 2018 the importers’ number were 57. The share of economic entity having dominant position in the butter commodity market decreased from 74% to 49% for the mentioned period. In the flour market 149 economic entities are already operating in 2018 instead of 30 economic entities in 2014, the share of major economic entities in this case also decreased from 38% to 5%, which means that there are no dominant economic entities in the flour market. The situation is the same for almost all socially important commodity markets. Within four years, in sugar commodity market the number of importers increased from 36 to 62 and the market share of the economic entity having dominant position decreased from 94 to 78 %. Currently 21 economic entities are importing bananas instead of 9 economic entities and the share of economic entities decreased from 92% to 56%.
Within a year SCPEC RA conducted more than 113 sectorial studies
In the current year the Commission conducted 113 sectorial studies by its own initiative to reveal possible competition issues. The majority of the studies were conducted in the sphere of trade and services, social insurance, mining industry, as well as manufacturing, healthcare, agriculture and telecommunications. In the result of carried out work a number of competition issues have been revealed as well as in most cases a number of competition issues have also been prevented.
In 2018 more than 202 detected cases were sent to other state authorities
Hundreds of studies conducted by the Commission show that not all competition issues are in the regulatory scope of RA competition authority. Active cooperation with other state authorities is needed in addressing the many challenges, as in many cases the Commission struggles not against the cause of a given competition issue but of its consequence; and encountered reasons of competition issues are in the scope of regulation of other state bodies. Thus, more than 202 problematic cases were revealed in the result of studies carried out during the current year, 140 of which were in the public procurement sphere. All cases were sent to the relevant state authorities, and in some cases the law enforcement agencies were notified about them. The Chairman of SCPEC RA Mr. Artak Shaboyan in his speech noted, that, although compared to the previous years, the violations in the public procurement sector have been significantly decreased, however the problematic competition issues still remain challenging.
SCPEC RA has been carrying out active work in the current year in the field of protection of Armenian producers’ interests in the territory of Eurasian Economic Union
Two major Armenian companies which are “Daughter Marianna” and “Grand Tobacco”, encountered barriers to the entry in selling their products in the Russian market which reduced their access to entry the market of Russian Federation. Taking into account that the problem arose in Russian Federation, RA Competition authority reached a complete solution of the problem in the result of cooperation with its partners. Currently three similar cases are under the consideration of the Commission. In the first case, “Taron-Avia” company appealed a complaint against the use of discriminatory rates by airports of Russian Federation, which does not allow to compete with Russian airline companies on equal terms. The second issue raised by “Grand Candy” company which informed that several Russian companies are producing and selling chocolates called “Panda”, but they do not have the right for it as given product is registered under their company’s name. The third case is related to the activity of the second largest company in the Russian in confectionery market which called “KDV Group”. In the latter regard, 6 domestic producers lodged a complaint which were informing that the company was engaged in dumping in RA market as it sells the product to the consumer at below the price of production cost. The above mentioned three cases are in the process and SCPEC RA will be consistent to protect the rights of Armenian companies through its active cooperation with partners of Eurasian Economic Union.
Nowadays thanks to the SCPEC RA efforts dozens of producing companies are actively cooperating in Russian retail sector
In the current year, the Commission has carried out extensive activities to ensure that the Armenian manufacturing companies are represented in the Russian market. To this end, the Commission invited the heads of the Retail Companies Association of Russian Federation to Armenia several times. The Association is the largest in the Russian Federation and it includes almost all hypermarkets networks: «X 5 Retail Group», «Lenta», «Perekrestok», «Pyaterochka», «Magnit», «Metro», «Azbuka Vkusa», «Globus», etc. The Chairman of SCPEC RA Mr. Shaboyan noticed that the aim of the Commission is to ensure that Armenian products were presented on equal competition terms in large foreign markets. Today we, indeed, have a great potential for production and export, many of our products can be competitive in EAEU countries. The problem is only sustainable and long-term cooperation; towards which we continue to do everything possible today. The fact is that he basis of cooperation has already been laid and it continues to develop actively.