YEREVAN (RFE/RL)–Armenia’s state anti-trust body announced on Friday an investigation into the legality of consumer price increases resulting from the abrupt devaluation of the national currency, the dram.
The State Commission on the Protection of Economic Competition (SCPEC) said it suspects that the retail prices of vegetable oil, butter, drugs and household durables have soared in a “disproportionate and unfounded” manner.
The commission chairman, Ashot Shahnazarian, told journalists that the purpose of the inquiry is to determine whether the companies importing and selling these goods colluded to fix prices or abused their market position otherwise. He said regulators will specifically compare their profit margins before and after the 20 percent drop in the dram’s value engineered by the Central Bank of Armenia (CBA) on Tuesday.
“Many shops today sell products worth 270 drams for 350 drams,” complained Shahnazarian. “Why? On what grounds?”
The official asserted at the same time that Armenia’s main supermarket chains have resorted to only limited price rises and are not suspected of any wrongdoing. He said such rises are justified and inevitable given the dram’s decreased market value.
The supermarkets grappled with brief panic buying on Tuesday as consumers anxiously sought to stock up on basic foodstuffs in anticipation of a further dram depreciation. The dram’s exchange rate has been stable since then, though.
The Armenian currency strengthened slightly for the second consecutive day on Friday, trading at 361.3 per U.S. dollar. The dollar bought 372.5 drams at Yerevan’s stock exchange on Tuesday. Shahnazarian predicted that some consumer prices will therefore fall in the coming days.
Some analysts cast doubt on the SCPEC’s ability to influence this process. “Shops or any other economic entities are free to set any prices they want,” said Samvel Avagian, an economics commentator with the business daily “Kapital.” “That is their right. No state body has the right to force a shop to lower or raise prices.”
Avagian said the commission should instead crack down on a handful of companies enjoying a de facto monopoly on imports of fuel, wheat, sugar and other key foodstuffs. “Based on the past experience, I don’t expect any serious intervention [by the SCPEC,]” he told RFE/RL. “The commission can at best fine one or another entity.”