You’d be forgiven for having missed the story that in late March, Russian retailers were complaining about a lack of sugar. Sugar producers had simply stopped delivering the goods to retailers and shelves were increasingly empty. If that reminds the older readers of the situation in the Soviet Union, you are not wrong, since the cause of this temporary shortage was similar. In December, President Vladimir Putin ordered a price cap on sugar and sunflower oil to limit inflation and enable poorer Russians to be able to afford basic food items. The government limited prices for a pound of sugar to 36 Rubles for producers and 46 Rubles for retailers. That was roughly one quarter below the existing retail price at the time and would have cost sugar producers an estimated $140 million in lost revenue. To make up for this shortfall, the government promised to pay the sugar producers about half of it through government subsidies, yet, when the subsidies didn’t arrive in time, the sugar producers simply stopped delivering their goods and threatened to stop producing sugar altogether until the government paid up.
I am not a fan
I am not a fan
I am not a fan
You’d be forgiven for having missed the story that in late March, Russian retailers were complaining about a lack of sugar. Sugar producers had simply stopped delivering the goods to retailers and shelves were increasingly empty. If that reminds the older readers of the situation in the Soviet Union, you are not wrong, since the cause of this temporary shortage was similar. In December, President Vladimir Putin ordered a price cap on sugar and sunflower oil to limit inflation and enable poorer Russians to be able to afford basic food items. The government limited prices for a pound of sugar to 36 Rubles for producers and 46 Rubles for retailers. That was roughly one quarter below the existing retail price at the time and would have cost sugar producers an estimated $140 million in lost revenue. To make up for this shortfall, the government promised to pay the sugar producers about half of it through government subsidies, yet, when the subsidies didn’t arrive in time, the sugar producers simply stopped delivering their goods and threatened to stop producing sugar altogether until the government paid up.