The initiative is aimed at providing further support for domestic producers in a situation where food retailers have replaced the products under embargo with foreign goods from other countries. The draft law envisages separating categories. We estimate the aggregated share of the imports at below 50% for companies in the convenience formats, while it would be hard to replace certain SKUs (such as beef and fruits and vegetables off season) due to domestic capacity limitations. This might result in shortages and a new wave of food inflation.
We highlight the vague outlook on how these initiatives might be implemented and so expect a limited market reaction to the update.