Prime Minister instructs to strengthen control over compliance with 15% markup on socially important goods

On March 19, 2022, Prime Minister Alikhan Smailov chaired a regular meeting on implementing the instructions of the Head of State and the Operational Action Plan to stabilize the socio-economic situation in the Republic of Kazakhstan.

Since the beginning of the year, prices for socially significant food products in Kazakhstan have increased by 8%. Price increases were recorded in all regions.

In the context of regions, the maximum increase in prices over the previous week was allowed in the West Kazakhstan region by 9.5%, Aktobe region — by 8.7%, Pavlodar region — by 7.1%, and Atyrau region by 6.7%.

The Prime Minister of the Republic of Kazakhstan Alikhan Smailov made remarks to the akims of a number of regions in which a significant increase in prices for socially significant food products was allowed.

“In the region, price increases were allowed for all socially significant food products. Both since the beginning of the year, and for the week. It is very sensitive for the population. We went through a large number of stores in Uralsk. Sugar prices are low in some places and high in others. I specifically sent people to all regions of the country. In some outlets there is an increase in prices by 20%. We need to control the margin. No one is following this,” said Alikhan Smailov, addressing the akim of the West Kazakhstan region.

Using a specific example of sugar prices, the Prime Minister pointed out that the region is not controlling prices for socially significant food products, monitoring the prevention of exceeding the 15% retail margin.

The akim of Aktobe region also received a remark, where the maximum growth rates in the country were recorded: for potatoes by 32.8%, carrots — by 38.3%.

According to the Prime Minister, over the past week, during the operational raids in the Republic of Kazakhstan, 5,000 violations were revealed — facts of an unreasonable rise in prices for socially significant goods.

“There are general violations. If the wholesale price rose, then another question. But when the wholesale price does not change, and the margin increases by 2 times or more, then we see an already unreasonable increase in prices. This should not happen,” said Alikhan Smailov.

In pursuance of the instructions of the Head of State, in order to prevent shortages and uncontrolled rise in food prices, food stabilization funds are being formed in the Republic of Kazakhstan.

As of March 17, 2022, the republican stocks of socially significant products, including stabilization funds, capacities of trade facilities, manufacturing enterprises, warehouses were: 421,992 tons of potatoes, 70,876 tons of carrots, 103,490 tons of onions, 42,860 tons of cabbage, 11,832 tons of buckwheat, 29,165 tons of sunflower oil, 28,005 tons of sugar and other products.

Over the past week, within the framework of antimonopoly response measures in the Republic of Kazakhstan, 9 agreements were concluded to prevent unjustified price increases, as well as to reduce the trade markup from 15 to 10%.

In particular, contracts were concluded in Nur-Sultan with a flour manufacturer, in the Karaganda region — with retail chains, in the Kostanay region — with wholesale suppliers of sugar and buckwheat, in Atyrau — with manufacturers of dairy products and eggs, in the West Kazakhstan region — with a chicken egg producer.

Eight investigations were initiated on the facts of violations over the past week.

In the Kostanay region, an investigation has been launched into the wholesale supplier of chicken meat, Opt Torg Company Plus; in Karaganda, Akmola, Pavlodar, North-Kazakhstan — for chicken egg producers Karaganda Kus LLP, Agrofirma Kurma LLP, Ushtobe Kus LLP, Izhevsky LLP, Pavlodar Kus LLP, Sharbakty Kus LLP, Alekri LLP, Adel Kus LLP; in the Mangystau region — for the manufacturer of ammonium nitrate KazAzot JSC; in Almaty — for the producer of ammophos KazPhosphate LLP; in the Aktobe region — by wholesale suppliers KAIS Invest LLP and As-An Firm LLP.

Following the meeting, the Prime Minister instructed the Trade Committee at the next meeting to report on the results of the work done to monitor compliance with the approved retail markup in the regions and the main causes of violations.

The heads of regions were instructed to strengthen control measures to monitor the maximum allowable markups in the prices of socially significant goods and continue the work of regional commissions to investigate intermediary schemes along the entire pricing chain, with the adoption of appropriate measures.

In addition, the Prime Minister recommended that the heads of regions conclude contracts in advance with domestic producers of early vegetables in order to meet forecast needs.

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