Meat Prices Set to Soar Up to 10% in Moscow

Five leading meat producers will raise their prices 10 percent this month amid a price-fixing probe by the Federal Anti-Monopoly Service.

Eksima, which owns the Mikoyanovsky meat factory, raised prices on its products between 5 percent and 10 percent on Tuesday, Eksima marketing director Andrei Khizhnyak said.

"This is a lot for the meat market. In the past, prices were never raised by more than 2 percent to 4 percent," he said.

Two major producers, KampoMos and TAMP (Tagansky), will hike their prices by roughly 10 percent by November, their general directors said. Two other producers, Tsaritsyno and Cherkizovsky, also confirmed they will raise prices, but declined to say by how much.

Together the five producers account for about a quarter of the nation's nonpoultry meat market, according to the Russian Meat Union, which estimates the total market to be worth about $12.3 billion per year, with canned food and meat products accounting for about half.

Producers blamed the price hike on escalating prices for raw meat, which accounts for up to 70 percent of the costs of making sausage, salami and other meat products. In the last 18 months, the prices of pork and beef have risen 194 percent and 19 percent, respectively, while the price of sausage has risen only 19 percent, according to union data.

KampoMos chief Fyodor Ogarkov said his company has raised prices by only 12 percent this year, despite the between 60 percent and 70 percent rise in the price of pork.

"Meat-packing plants are in a position where they are forced to raise prices," said Sergei Yushin, managing director of the National Meat Association.

Until now, however, factories avoided steep price hikes due to opposition from large retail chains, which account for about 10 percent of nationwide sales, Khizhnyak said. Retailers said they were dealing with each supplier separately.

"We negotiate individually with each of our suppliers. They must prove the reason behind the change," said Eva Prokofyeva, spokeswoman for Paterson.

Teimuraz Kharitonashvili, a department head at the Federal Anti-Monopoly Service, said he understood the logic behind the price hike.

"The only question is why they decided to do it simultaneously and whether there is an element of price-fixing here. We are going to look into this," he said.

Meat factories said they made their decisions independently.