Eurasianet corespondent Marianna Grigoryan's recent piece about hypermarket chain Carrefour's struggle to break into the Armenian market because of a group of oligarchs' control over the food supply chain, provided a fascinating glimpse into how rotten politics can impact the most mundane daily chores, such as shopping and cooking. Interested in hearing more about this story, I sent Marianna a list of followup questions. Our exchange is below:
1. What made you think about reporting on this subject?
When nearly six months ago it was announced that Carrefour is coming to Yerevan, many people were curious to see if that at least will happen. In Armenia, where in many spheres there is the heavy existence of monopolies, Carrefour’s possible existence became some kind of question of principa. I was excited, as were many others, to have Carrefour in Yerevan as a competitive hypermarket next to Yerevan's existing two or three supermarket networks. But at the other side speculations started as expected and severak months later there is still nothing exact – only Carrefour's “Opening soon.” So I decided to write about the situation in light of a story I had already started about Armenian oligarchs. 2. In general, where do Armenians shop for their food?
In general in Armenia, especially in Yerevan, the biggest network of supermarkets-hypermarkets is 'Yerevan City,' which belongs to the pro-government oligarch Samvel Aleksanyan, a member of parliament who controls sugar, flour and other spheres of food import and dictates the “prices.” For example, officially 99.9 percent of sugar imports and domestic sales belong to his family. There are also two other supermarket networks but they have been mostly empty in recent months. 3. Do you think Armenians are looking for the kind of shopping experience a Carrefour would offer?
Yes, sure. Carrefour can bring new quality, competitive prices, and new products. Besides, as Carrefour itself imports the products, it means that hypermarket will be able to get around monopolistic prices. 4. What are the practical implications of the oligarchs influence for Armenian food shoppers?
Mainly there is an impact on quality and prices. Presently, grains, flour, and sugar, and recently also meat and even fruit, are obviously artificially high. For example, because of Samvel Aleksanyan’s sugar monopoly, every shop – even small ones – sell the sugar imported by him. That means that because of his monopoly he can control the prices and the quality. The same is in wheat flour market, which is also controlled mainly by Aleksanyan. As a result, in Armenia we have high flour prices. For example, as shows a study entitled “Monopolies in Armenia” by the Hrayr Maroukhian Foundation (HMF), international wheat price fell by 23 percent during February-March 2011. But what do we have in Armenia? After Parliamentary elections on May 2011, the prices on wheat flour increased by almost 30-40 % over the last year. 5. Have Armenian food sellers come up with any creative ways to get around the influence of the oligarchs on the market?
When food importers are mainly the oligarchs, food sellers cannot easily win customers over; they simply cannot sell the products for less than they themselves bought them for.