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Food retail – proposed amendments to the Retail Law

 
22.01.2015

According to Vedomosti, State Duma representatives have proposed amendments to the Retail Law. The key changes are introducing a ban on including marketing services in supply contracts, lowering retro bonuses from 10% to 3% and decreasing the days in accounts payable for various food categories by 5-10 days.

The development implies downside risks to retailers' profitability and working capital metrics. Initiatives to improve the terms of supply have a long history, and so there is still only a vague outlook on how the current proposals might be implemented. The next milestone to watch is the inclusion of these amendments onto the priority list. That would significantly speed up the processing time towards the first reading.

Maria Kolbina, Nikolay Kovalev
VTB Capital analyst

Tags:
retail

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