Improving Conditions for Doing Business in Russia

12 january 2016

The Analytical Center continues to publish a series of Bulletins on the development of competition. The latest Bulletin is titled ‘Concentration in Russian Markets: Trends during an Economic Downturn.’ Experts note that the conditions for doing business in Russia continue to improve despite the economic downturn the country is experiencing and the overall decline in business activity in the country. This assessment is confirmed by the World Bank’s Doing Business 2016 rating.

The Bulletin analyzes the statistics for the current trends in how companies are behaving in the Russian markets. As economic conditions worsen during economic downturns, the number of organizations functioning in the economy falls off, the players that remain in the commodity markets begin to command more influence and that leads to increased risks of there being less competition. The tendencies specified are introduced as a result of primarily two processes: mergers and acquisitions and through bankruptcy.  It is mass bankruptcies of businesses that are having the greatest impact on market concentration during economic downturns.

The review also presents the latest business news summaries with expert commentary. For example, on 5th January, 2016, the provisions of the so-called fourth antimonopoly package went into effect. Under the new requirements, any cooperation agreements entered into between competing companies must be approved by the Federal Antimonopoly Service, and the Russian Government has the right to impose rules for non-discriminatory access to goods manufactured and/or sold by companies that control more than 70% of their market.

Experts believe that the ban on imports of groceries from Turkey may further limit competition in the grocery market in Russia while the temporary ban imposed by Russia on exports of pulp may have a negative impact on some sectors of Ukraine’s economy as Ukraine is the main importer of Russian cardboard.

More in the Bulletin ‘Concertation in Russian Markets: Trends during an Economic Downturn’

Other Bulletins on development of competition in the Publications section