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ARMENIA HIT BY SUGAR SHORTAGE
By Shakeh Avoyan
Radio Liberty, Czech Rep.
Oct 23 2007
Armenian authorities and retailers gave on Tuesday conflicting
explanations of mysterious shortages of sugar in the country that
cast fresh spotlight on the lucrative monopoly on imports of this
and other foodstuffs enjoyed by a government-connected tycoon.
Sugar was not available for sale in most grocery stores in Yerevan.
Supermarkets owned by Samvel Aleksanian, a businessman close to the
government, were apparently the only places where city residents
could buy it at a reasonable price. Long lines of people could be
seen outside them throughout the day.
The crisis erupted on Saturday as the retail price of sugar suddenly
skyrocketed from an average of 230 drams ($0.7) per kilogram. Some
stores were selling it for as much as 600 drams per kilogram on
Monday evening.
The Armenian government's anti-trust body, State Commission on the
Protection of Economic Competition on Tuesday blamed the "artificial
shortage" on retailers, saying that they deliberately cut sugar supply
to make "super profits." " "We know that some shops have stored sugar
that was not put up for sale yesterday so that they can sell it for
600 drams," said the commission chairman, Ashot Shahnazarian.
However, retailers interviewed by RFE/RL rejected the accusations,
laying the blame on Aleksanian's Salex Group company that
single-handedly controls wholesale sugar imports to Armenia. "He
probably wants to boost his supermarkets' rating by not supplying
others," said one grocery store manager, who asked not to be
identified. "He is probably trying to show that he is the boss in
the republic and can easily hurt other people."
"There is simply no sugar in the market right now," added the
manager. "We just can't buy it from our [wholesale] supplier."
But Shahnazarian insisted that Aleksanian and his company are not
responsible for the unprecedented crisis. He argued that Aleksanian's
supermarkets did not raise the sugar price to cash in on the shortages.
Aleksanian, better known to most Armenians as Lfik Samo, is one of
the country's wealthiest entrepreneurs who holds sway in Yerevan's
blue-collar Malatia-Sebastia district. A parliament deputy affiliated
with the governing Republican Party, he has close ties with President
Robert Kocharian and Prime Minister Serzh Sarkisian. Those ties are
believed to be the key factor behind his de facto monopoly on imports
of sugar, flour, cooking oil, butter and other basic foodstuffs.
The sugar crisis began just days after a sharp increase in the retail
price of cooking oil and butter. Shahnazarian's commission found the
price hike "artificial and unjustified" and fined Salex on Thursday.
By Shakeh Avoyan
Radio Liberty, Czech Rep.
Oct 23 2007
Armenian authorities and retailers gave on Tuesday conflicting
explanations of mysterious shortages of sugar in the country that
cast fresh spotlight on the lucrative monopoly on imports of this
and other foodstuffs enjoyed by a government-connected tycoon.
Sugar was not available for sale in most grocery stores in Yerevan.
Supermarkets owned by Samvel Aleksanian, a businessman close to the
government, were apparently the only places where city residents
could buy it at a reasonable price. Long lines of people could be
seen outside them throughout the day.
The crisis erupted on Saturday as the retail price of sugar suddenly
skyrocketed from an average of 230 drams ($0.7) per kilogram. Some
stores were selling it for as much as 600 drams per kilogram on
Monday evening.
The Armenian government's anti-trust body, State Commission on the
Protection of Economic Competition on Tuesday blamed the "artificial
shortage" on retailers, saying that they deliberately cut sugar supply
to make "super profits." " "We know that some shops have stored sugar
that was not put up for sale yesterday so that they can sell it for
600 drams," said the commission chairman, Ashot Shahnazarian.
However, retailers interviewed by RFE/RL rejected the accusations,
laying the blame on Aleksanian's Salex Group company that
single-handedly controls wholesale sugar imports to Armenia. "He
probably wants to boost his supermarkets' rating by not supplying
others," said one grocery store manager, who asked not to be
identified. "He is probably trying to show that he is the boss in
the republic and can easily hurt other people."
"There is simply no sugar in the market right now," added the
manager. "We just can't buy it from our [wholesale] supplier."
But Shahnazarian insisted that Aleksanian and his company are not
responsible for the unprecedented crisis. He argued that Aleksanian's
supermarkets did not raise the sugar price to cash in on the shortages.
Aleksanian, better known to most Armenians as Lfik Samo, is one of
the country's wealthiest entrepreneurs who holds sway in Yerevan's
blue-collar Malatia-Sebastia district. A parliament deputy affiliated
with the governing Republican Party, he has close ties with President
Robert Kocharian and Prime Minister Serzh Sarkisian. Those ties are
believed to be the key factor behind his de facto monopoly on imports
of sugar, flour, cooking oil, butter and other basic foodstuffs.
The sugar crisis began just days after a sharp increase in the retail
price of cooking oil and butter. Shahnazarian's commission found the
price hike "artificial and unjustified" and fined Salex on Thursday.