State anti-trust regulators opened on Wednesday a formal inquiry into a drastic rise in the prices of cheese that has been observed in Armenia over the past two weeks.
The retail cost of various types of locally produced cheese, a staple food consumed by most Armenians on a virtually daily basis, has jumped by between 30 and 40 percent for reasons that are not yet clear.
Agriculture Minister Gerasim Alaverdian downplayed the surge and blamed it on a seasonal drop in milk production in the country as well as increased exports of Armenian cheese. “That means dairy products will inevitably become more expensive,” he told RFE/RL’s Armenian service on Friday.
Alaverdian claimed that there were similar price hikes in previous years for the same reason. “If you look at figures from last year and 2008, you will see the same price rises,” he said.
Consumer groups and government critics strongly dispute this claim, however. Armen Poghosian of the non-governmental Consumers Association alleged on Wednesday price fixing among the country’s leading dairy firms.
“This is an artificial phenomenon,” Poghosian told reporters. “Enterprises and entrepreneurs want to push up the price as much as possible.”
Hrant Bagratian, an opposition leader and former prime minister, offered a different explanation at a news conference on Tuesday. He claimed that Armenian cheese makers use not only domestic but also imported milk and that some government-linked businessmen are now monopolizing those imports.
“We have information that there is an attempt to monopolize imports of milk powder and the prime minister and the head of the State Revenue Committee are not thwarting it,” Bagratian said without offering any proof of the claim.
The State Commission on the Protection of Economic Competition (SCPEC) discussed the situation in the cheese market at a meeting on Wednesday. It ordered all major dairy firms producing cheese to submit written explanations of the price hikes by the end of this week. They will face fines if found guilty of price collusion or other anti-trust practices.
Poghosian was skeptical about the inquiry, questioning the regulatory body’s ability and desire to enforce fair business competition in the sector.