Armenian authorities and retailers gave on Tuesday conflicting explanations of mysterious shortages of sugar in the country that cast fresh spotlight on the lucrative monopoly on imports of this and other foodstuffs enjoyed by a government-connected tycoon.
Sugar was not available for sale in most grocery stores in Yerevan. Supermarkets owned by Samvel Aleksanian, a businessman close to the government, were apparently the only places where city residents could buy it at a reasonable price. Long lines of people could be seen outside them throughout the day.
The crisis erupted on Saturday as the retail price of sugar suddenly skyrocketed from an average of 230 drams ($0.7) per kilogram. Some stores were selling it for as much as 600 drams per kilogram on Monday evening.
The Armenian government’s anti-trust body, State Commission on the Protection of Economic Competition on Tuesday blamed the “artificial shortage” on retailers, saying that they deliberately cut sugar supply to make “super profits.” ” “We know that some shops have stored sugar that was not put up for sale yesterday so that they can sell it for 600 drams,” said the commission chairman, Ashot Shahnazarian.
However, retailers interviewed by RFE/RL rejected the accusations, laying the blame on Aleksanian’s Salex Group company that single-handedly controls wholesale sugar imports to Armenia. “He probably wants to boost his supermarkets’ rating by not supplying others,” said one grocery store manager, who asked not to be identified. “He is probably trying to show that he is the boss in the republic and can easily hurt other people.”
“There is simply no sugar in the market right now,” added the manager. “We just can’t buy it from our [wholesale] supplier.”
But Shahnazarian insisted that Aleksanian and his company are not responsible for the unprecedented crisis. He argued that Aleksanian’s supermarkets did not raise the sugar price to cash in on the shortages.
Aleksanian, better known to most Armenians as Lfik Samo, is one of the country’s wealthiest entrepreneurs who holds sway in Yerevan’s blue-collar Malatia-Sebastia district. A parliament deputy affiliated with the governing Republican Party, he has close ties with President Robert Kocharian and Prime Minister Serzh Sarkisian. Those ties are believed to be the key factor behind his de facto monopoly on imports of sugar, flour, cooking oil, butter and other basic foodstuffs.
The sugar crisis began just days after a sharp increase in the retail price of cooking oil and butter. Shahnazarian’s commission found the price hike “artificial and unjustified” and fined Salex on Thursday.
(Photolur photo: Samvel Aleksanian.)