The Russian government is exploring new regulations to cap prices on essential food items as inflation continues to rise, fueled by increasing production costs and wartime expenditures. The Agriculture Ministry has proposed amendments to trade laws that would regulate pricing for staples such as milk, eggs, potatoes, sugar, sunflower oil, carrots, tomatoes, onions, and apples.
According to a letter obtained by Kommersant, two approaches are under consideration. The first would require at least 80% of sales in designated categories to be conducted under fixed-price, long-term contracts between producers and retailers. These agreements could only be renegotiated once per year and would be legally protected from termination without a court ruling. The second, more interventionist option involves the government imposing a “price corridor,” setting minimum and maximum prices for 80% of goods in the affected categories.
The measures aim to tackle inflation resulting from poor harvests, supply chain disruptions, and rising defense spending. However, the plan has sparked criticism from industry representatives. Sergei Yushin, head of the National Meat Association, warned that strict regulation could make production unprofitable, potentially halting operations due to high costs for electricity, fuel, and logistics. Dmitry Vostrikov, executive director of the Rusprodsoyuz food suppliers union, argued that pricing agreements should remain voluntary to reflect regional conditions and production expenses.
Critics also caution that the proposed price corridors would not address retail markups, one of the main inflation drivers, and could create an uneven playing field, placing undue burdens on producers and wholesalers. Despite these concerns, responses from trade groups were requested by July 25, indicating that the government may move forward with its plans depending on industry feedback. The debate highlights the challenge of balancing inflation control with maintaining a viable agricultural sector.
