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Armenian Company Fined For Egg Shortages


Armenia -- Eggs on sale in a supermarket amid unexpected shortage ahead of New Year festivities, Yerevan, 28Dec2010

Armenia -- Eggs on sale in a supermarket amid unexpected shortage ahead of New Year festivities, Yerevan, 28Dec2010

An Armenian poultry company was fined 100 million drams ($270,000) on Wednesday after state antitrust regulators blamed it for last December’s brief shortages of eggs in Armenia.


Eggs suddenly disappeared from virtually all supermarkets and grocery stores in Yerevan and some regions outside the capital on the eve of the New Year and Christmas holidays. The unprecedented crisis pushed up their retail prices and forced the Armenian government to arrange emergency imports of eggs.

The government blamed it on an increase in consumer demand for this and other foodstuffs that traditionally precedes public holidays. But the State Commission for the Protection of Economic Competition (SCPEC) launched an antitrust inquiry into domestic poultry companies dominating the market.

Presenting the results of the inquiry, the SCPEC chairman, Artak Shaboyan, said the shortages were caused by one of those firms, the Lusakert Poultry Factory. “We accuse you of creating the deficit,” he told its representatives summoned to the SCPEC.

Shaboyan claimed that the company deliberately cut back on daily supplies of eggs to major retailers and sold some of its production to “unknown buyers” by “shadowy means” in late December. Citing Armenian antirust legislation, he said Lusakert will therefore have to pay a fine equivalent to 2 percent of its 2009 revenues.

Manase Yepremian, a Lusakert representative, dismissed the findings of the probe, saying that they are based on “theoretical observations,” rather than concrete evidence. “Why would we create the deficit?” he told journalists. “To make extra profits? It has to be proved that the company has made such profits.”

Yepremian blamed the egg crisis on increased consumer demand. “I presume that the same situation will emerge on the eve of Easter,” he said. “Let the commission again look for a black cat in the dark room.”

“If there are more such abuses, we will punish them again,” warned Shaboyan. “We will punish them more strictly next time around.”

According to the SPEC, Lusakert and another company, the Yerevan Poultry Factory (YPF) , together account for 80 percent of Armenian egg production. YPF reportedly purchased several other firms last summer after drastically cutting the price of its eggs. Government critics said at the time that the “dumping” paved the way for the takeovers.

The SCPEC sanctions against Lusakert came more than a week after Prime Minister Tigran Sarkisian called for a stricter enforcement of Armenia’s antitrust laws, which are about to be toughened at his government’s initiative. He said the SCPEC has not done enough to address a lack of competition in some key sectors of the Armenian economy, which is widely regarded as an impediment to its faster growth.
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