By Ruzanna Stepanian
A state anti-trust body has found that several companies are holding de facto monopolies in Armenia’s sugar, petrol, diesel, brandy and detergent market and warned them not to abuse their advantage or face penalties.
The State Commission on Protection of Economic Competition (SCPEC) revealed its studies on Wednesday showing that in particular two leading petrol importers, Flash and CPS, share more than 80 percent of the market between themselves, respectively having supplied 41.4 and 40.4 percent of the whole amount of petrol imported to the republic in the first half of 2006. Seven companies, including the two above-mentioned ones, were engaged in petrol import to Armenia in the first six months of the year.
Deputy Director of the Flash trading company Mushegh Elchian admits that their company may have a leading position on the petrol market, but says it is solely due to their greater financial and institutional possibilities.
“Fuel trade requires large financial and capital investments and smaller companies will always find themselves in a worse situation than larger importers,” Elchian said. “Besides importing fuel, one also needs to have storage capacities.”
Flash’s representative boasted of his company’s ability to store up to 12,000 tons of fuel at a time, which he said is unmatched in the republic.
Elchian denied any existing limits for the amount of petrol imports decided among the sphere’s companies.
According to economic agents, the appreciation of the dram has impacted gasoline and diesel fuel prices. In particular, they say it precluded a hike in fuel prices. Flash’s deputy director announced that gasoline prices will go down by 10 drams (2.6 cents) in the republic beginning next week.
Gasoline is imported to Armenia mainly from Europe. Specialists say Russia has no oil refineries that would produce gasoline meeting European standards.
Elsewhere, the SCPEC found the Salex Group Company as holding a monopolistic position in Armenia’s sugar market. By sugar sales this company has seized 91.4 percent of the market this year and comes to replace last year’s monopolist Fleetfood that held 99.4 percent of the market by its sales in 2005 but dramatically reduced its sales to only 7 percent this year.
There are speculations that both companies belong to MP Samvel Aleksanian, who is known to hold a monopoly on sugar imports to Armenia. The lawmaker could not be reached for comment.
The Commission also reviewed the brandy market and found the Yerevan Brandy Company to be a monopolist in this field. This company by far outdoes competitors in terms of both production and export volumes.