How the manufacturer's register from the FAS will regulate the market

The explosive prices for building materials did not go unnoticed not only by consumers, but also by the Federal Antimonopoly Service, which recently developed a demo version of the register of large manufacturers of building materials to solve this problem.

According to the head of the Federal Antimonopoly Service (FAS) Maxim Shaskolsky, the trial version of the register of manufacturers will include information on the volume of sales, capacities and revenues of companies operating in the markets of wood, non-metallic and paints and varnishes, cement, brick, aerated concrete, mineral wool, sheet glass , roofing materials, bitumen, reinforcement and primary polymers.

Thus, the FAS will control the pricing of large manufacturers of basic and auxiliary building materials, which will allow the service to influence the rise in prices.

The price turbulence of 2021 in the building materials market led to the need to introduce mechanisms to increase the cost of government contracts for contractors and provoked an increase in prices in the real estate market. According to Dmitry Yekimov, deputy general director of the DomDA aggregator, the severity of the situation on the building materials market raises serious concerns from the government, the presidential administration, the banking sector, commercial developers and government customers in the construction sector.

Experts explain the additional control over the industry by the authorities by the explosive growth in prices for metal and wood, which was noted during this year.

“By all accounts, there has been no such growth in over twenty years. In these conditions, the FAS should have a tool that will allow you to see a holistic picture of the main and related markets. This is important to ensure economic security and the ability to make quick decisions in the face of another price storm, which could potentially be triggered by global macroeconomic trends, ”Yekimov said.

The owner of the Lazovsky House construction company Maxim Lazovsky, in turn, hopes that the FAS initiative will not only increase the transparency of the supply of construction sites, but also hit the gray market, because the Ministry of Construction recently said that 25% of products on the market are counterfeit.

The FAS began mass inspections of building materials manufacturing companies back in September this year, but the creation of a demo version of the register will allow the service to focus its inquiries on individual companies and categories of building materials instead of mass mailings to all market participants. The disadvantage of this register is that the Russian market is very large and has a pronounced regional specificity. According to the executive director of Xella Russia (producer of YTONG blocks) Andrei Bashkatov, such registers cannot reflect the details that lie behind the proceeds.

“Each company has its own strategy, mode of operation, commercial policy and market niche. Comparing them by revenue is an oversimplification that will still require a detailed parsing of the data. The criteria for including companies in such a register are not entirely clear. If a company has less than 10% of the market, should it be included? What's the point of monitoring the performance of highly competitive fragmented product categories? At the moment, we have very little information about this register, and this is rather a minus, "Bashkatov concludes.

Thus, the FAS will need to "fine-tune" the antitrust policy in this area.

However, the surveyed experts consider the creation of the register only as one of the tools for regulating the situation on the building materials market. According to Andrey Kolochinsky, managing partner of VectorStroyFinance, the FAS inspections are just a point measure, and to stabilize prices, it is necessary to saturate the markets and increase world production.

“The current rise in prices for raw materials and building materials is due to a slowdown in economic growth and a halt in a number of industries during the lockdown period, and then - a sharp increase in demand and a rapid economic recovery. Due to the integration of our economy into the world market, prices on the domestic market synchronously follow world prices, ”explains Kolochinsky.

Thus, the growth in demand for fittings and the subsequent shortage of these products may be due to the launch of large infrastructure projects in Asia or Latin America.

Another reason for the rise in prices for building materials is the weak ruble. According to David Khudoyan, General Director of Optima Development (developer of the Prime Park residential quarter), in these conditions it is more profitable for manufacturers to supply products for export and then convert profits into domestic currency.

“This means that we need a comprehensive solution to the problem, which is not limited to the competence of the FAS,” says Vladimir Shchekin, co-owner of Rodina Group (developer of the Russian Design District residential cultural and educational cluster). According to him, it is not only a matter of price regulation, but also of the production and sale of raw materials and final products of the building materials industry.

Apparently, in order to effectively contain prices, a long-term plan-forecast of production volumes and resource consumption will be requireds and the building materials themselves. This is an initiative of the Ministry of Industry and Trade, and perhaps it will help to link antimonopoly policy and the interests of all industry participants.

Source: https://www.radidomapro.ru/