Armenian Oligopolies Hold 60 Percent Of The Market -World Bank Report

YEREVAN, November 27. / ARKA /. Monopolies and oligopolies hold about 60 % of Armenia’s market, according to a new World Bank report “Republic of Armenia: Accumulation, Competition, and Connectivity,” dedicated to solving the job creation challenge, launched today in Yerevan.

Presenting the report, Gohar Gyulumian, a senior economist at the World Bank Office in Yerevan, said the statistics show that the share of market held by monopolies is higher in Armenia than in other countries in the region of the South Caucasus and Eastern Europe, except for Azerbaijan, where the figure is more than 70 %.

According to her, domination of large companies in some segments of the market is not a negative factor in itself, however, the problem is that these companies abuse their dominant position due to absence of balance ensuring institutions.

Ms. Gyulumian said Armenia’s antitrust legislation needs a serious revamp, as repeatedly stated by the representatives of World Bank. More precisely, she urged the authorities to revise a legislation clause which says a company has a dominant position if it holds more than 33% of the market.

She said World Bank experts believe that the antitrust agency should be guided by the results of a dynamic market research, because today a company not holding more than 33 % of the market may use a string of mechanisms to seize a dominant position.

“Today, the State Commission for Protection of Economic Competition  is much more focused on the monitoring of prices than on a general market research, although its major ask is  not price regulation,  but detraction of  causes and effects of a price increase ,” she said.

According to the report, the most monopolized segments of the food market are sugar, olive oil and flour.  The monopolization degree is somewhat lower at the markets of pasteurized milk, wheat, coffee, butter, vegetable oil, rice and eggs.

The most competitive segments of the market, according to the report are agriculture, food processing, pharmaceuticals, alternative energy, banking and insurance, television, print media, construction, healthcare, retail trade and tourism.