Russia plans to return Soviet food price controls to curb inflation

Russian authorities are planning to introduce strict state regulation of prices for basic foodstuffs in an effort to curb inflation caused by a poor harvest and record military spending. About writes The Moscow Times.

The Russian Ministry of Agriculture has sent a request to the largest industry associations for feedback on amendments to the law on state regulation of trade. They must be submitted by July 25.

Two options are being considered:

1. Starting from 2026, at least 80% of sales must be made under long-term direct contracts with a fixed price that can be revised only once a year. It will be prohibited to terminate the contract out of court.
2. The state will set minimum and maximum prices (price corridor) for 80% of products.

Potatoes, carrots, cabbage, beets, tomatoes, onions, milk, eggs, sugar, apples, cucumbers, and sunflower oil may be subject to restrictions.

The reason for this was record price hikes. In May, potatoes in Russia went up more than 2.5 times, and borscht set vegetables went up by 57-87% year-on-year.

Producers and retailers criticize the initiative, saying that it is impossible to fix selling prices a year in advance under the current conditions.

They warn that strict regulation could make production unprofitable and lead to the shutdown of enterprises.

The amendments are expected to come into force on March 1, 2026. If the first option is chosen, the share of sales under long-term contracts will increase: in 2027 – up to 85%, and in 2028 – up to 90%.

• on July 25, the Central Bank of Russia sharply reduced the interest rate due to the risk of recession.