Mayor Yury Luzhkov imposed strict price controls on the popular Smolensky and Novoarbatsky supermarkets Monday after city officials publicly castigated the stores' directors for using last week's currency crisis to "enrich themselves."
A Luzhkov decree stripped the two stores and a vegetable distributor, Svezhy, of the right to set their own prices until March 1995, said mayoral spokesman Andrei Varchenya.
City inspectors found over the weekend that Novoarbatsky had marked up chicken by up to 100 percent and vodka by 15 percent, Varchenya said. Svezhy had hiked the price of potatoes 27 percent and beets 46 percent, while Smolensky had raised pork prices 17 to 43 percent, he said.
The markups were prompted by the ruble's 845-point plunge last Tuesday to 3,926 per dollar, but remained in effect after the Russian currency recovered to less than 3,000 per dollar Thursday.
"These storekeepers, whom we trusted, took advantage of the situation and did not live up to our trust," Vladimir Malyshkov, the head of the city's consumer market department, told a meeting of city inspectors and shop managers Monday.
Nadezhda Chutayanova, acting director of the Novoarbatsky supermarket, stood up to defend her decision to hike the price of imported chickens to 13,000 rubles ($4.34) per kilogram from 9,000. She said she had bought the chickens on consignment and feared she would not be able to pay.
"What guarantee did we have the dollar would not keep rising?" she said.
"But Nadezhda Konstantinovna, it fell -- and you didn't lower them Wednesday, or Thursday, or Friday," Malyshkov shouted, turning bright red. "Who gave you the right to line your pockets?"
While the decree was popular with shoppers, economists called the punishments needless.
"The market itself will reorient prices," said Mstislav Afanasyev, deputy director of the governmental Center for Economic Reform. "If you put out a carton of orange juice for 10,000 rubles, and it stands there for a week and doesn't sell, then of course you lower the price."
"Merchants are citizens too," he added. "It is not fair to take such harsh measures."
He said that prices were already coming down quickly in modest areas like western Moscow, and more slowly in the chic southwest, which he called "a good sign that market economics is beginning to work."
Svezhy and the two supermarkets, which are among the biggest, busiest and best-stocked Russian-run grocery stores in the city, were the first casualties of a citywide inspection blitz launched by the mayor Saturday to catch stores that kept prices high.
But they will not be the last, Malyshkov said in an interview.
He said Luzhkov's decree retroactively forbade all stores, including private ones, to raise prices on goods bought before the ruble's crash. Goods bought after the crash may be marked up only with proof that suppliers, too, had raised prices. The decree did not affect kiosks, where markups have been most noticeable.
Although most Moscow stores are privatized, the city retains a large measure of control over their activities through special lease agreements on their city-owned property.
Malyshkov said violators will lose rent discounts and other privileges, and two-time violators will be closed down.
"There will be no mercy," he said.
In stores Monday, few directors admitted to having raised prices last week.
Vera Soldatova, an administrator at a privatized store in northern Moscow, said the store had refused to order from suppliers who raised prices last week, such as the Cherkizovksy meat factory, which hiked the price of hot dogs from 5,600 rubles a kilogram to 8,100 and has since lowered it to 5,990.
"We believed the high dollar was an unnatural phenomenon, and we hoped it would pass," she said. "Everything went according to our prediction."
Store and kiosk owners interviewed at the weekend said they had placed large orders last Tuesday in the fear prices would go even higher, and were keeping prices high in an attempt to recoup losses.
Malyshkov dismissed suggestions that high prices were a hedge against future inflation. "It is simply the desire to make extra money," he said.
A Luzhkov decree stripped the two stores and a vegetable distributor, Svezhy, of the right to set their own prices until March 1995, said mayoral spokesman Andrei Varchenya.
City inspectors found over the weekend that Novoarbatsky had marked up chicken by up to 100 percent and vodka by 15 percent, Varchenya said. Svezhy had hiked the price of potatoes 27 percent and beets 46 percent, while Smolensky had raised pork prices 17 to 43 percent, he said.
The markups were prompted by the ruble's 845-point plunge last Tuesday to 3,926 per dollar, but remained in effect after the Russian currency recovered to less than 3,000 per dollar Thursday.
"These storekeepers, whom we trusted, took advantage of the situation and did not live up to our trust," Vladimir Malyshkov, the head of the city's consumer market department, told a meeting of city inspectors and shop managers Monday.
Nadezhda Chutayanova, acting director of the Novoarbatsky supermarket, stood up to defend her decision to hike the price of imported chickens to 13,000 rubles ($4.34) per kilogram from 9,000. She said she had bought the chickens on consignment and feared she would not be able to pay.
"What guarantee did we have the dollar would not keep rising?" she said.
"But Nadezhda Konstantinovna, it fell -- and you didn't lower them Wednesday, or Thursday, or Friday," Malyshkov shouted, turning bright red. "Who gave you the right to line your pockets?"
While the decree was popular with shoppers, economists called the punishments needless.
"The market itself will reorient prices," said Mstislav Afanasyev, deputy director of the governmental Center for Economic Reform. "If you put out a carton of orange juice for 10,000 rubles, and it stands there for a week and doesn't sell, then of course you lower the price."
"Merchants are citizens too," he added. "It is not fair to take such harsh measures."
He said that prices were already coming down quickly in modest areas like western Moscow, and more slowly in the chic southwest, which he called "a good sign that market economics is beginning to work."
Svezhy and the two supermarkets, which are among the biggest, busiest and best-stocked Russian-run grocery stores in the city, were the first casualties of a citywide inspection blitz launched by the mayor Saturday to catch stores that kept prices high.
But they will not be the last, Malyshkov said in an interview.
He said Luzhkov's decree retroactively forbade all stores, including private ones, to raise prices on goods bought before the ruble's crash. Goods bought after the crash may be marked up only with proof that suppliers, too, had raised prices. The decree did not affect kiosks, where markups have been most noticeable.
Although most Moscow stores are privatized, the city retains a large measure of control over their activities through special lease agreements on their city-owned property.
Malyshkov said violators will lose rent discounts and other privileges, and two-time violators will be closed down.
"There will be no mercy," he said.
In stores Monday, few directors admitted to having raised prices last week.
Vera Soldatova, an administrator at a privatized store in northern Moscow, said the store had refused to order from suppliers who raised prices last week, such as the Cherkizovksy meat factory, which hiked the price of hot dogs from 5,600 rubles a kilogram to 8,100 and has since lowered it to 5,990.
"We believed the high dollar was an unnatural phenomenon, and we hoped it would pass," she said. "Everything went according to our prediction."
Store and kiosk owners interviewed at the weekend said they had placed large orders last Tuesday in the fear prices would go even higher, and were keeping prices high in an attempt to recoup losses.
Malyshkov dismissed suggestions that high prices were a hedge against future inflation. "It is simply the desire to make extra money," he said.
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