ONE MILLION DOLLAR FINE IMPOSED ON DVIN HOLDING HAVING DOMINATING POSITION IN NITROGEN FERTILIZER MARKET
Noyan Tapan
Se p 3, 2008
YEREVAN, SEPTEMBER 3, NOYAN TAPAN. At the September 3 sitting,
the RA State Commission for Protection of Economic Competition made
a decision to impose a fine on Dvin Holding company in the amount
of 2% of its 2007 incomes but not in excess of 300 million drams
(a million dollars).
The chairman of the Commission Ashot Shahnazarian said at the sitting
that as a result of the proceedings initiated against the company
it was revealed that having a dominating position in the market of
nitrogen fertilizers, Dvin Holding used an unfounded price: it fixed
the sale price of nitrogen fertilizer for persons other than land
users at 111,430 drams in March 2008, whereas the actual price makes
84,000 drams.
During the proceedings the company stated that in accordance with
a decision of the government, it signed an agreement with the RA
ministry of agriculture, by which it was obliged to supply 20 thousand
tons of ammonium nitrate to agricultural producers – based on a list
of villages, which was decided by the government. The price was 84
thousand drams for a ton (74 thousand was to be paid by agricultural
producers, while 10 thousand drams was a subsidy to be paid by the
ministry of agriculture). According to a letter of Dvin Holding, its
partner – a Georgian nitrate-producing company warned that starting
from January 1, 2008, the export price would sharply rise, due to
which the company carried out the supply envisaged by the agreement
with the ministry of agriculture until December 30, 2007.
In the period of November 2007 to June 20, 2008, the company imported
23,985 tons of ammonium nitrate into Armenia. 20 thousand tons was sold
by the agreement with the RA ministry of agriculture. 1,700 tons of
the "off-the-list" amount was sold in Artsakh, including 1,000 tons
for 84 thousand drams a ton and 700 tons for 110 thousand drams a
ton. Whereas, according to the documents submitted by Dvin Holding,
in March the purchase price remained the same – in the structure of
the sale price of 1 ton of nitrogen fertlizer to land users and other
persons. As a result, the sale price of fertilizer made 111,430 drams
in March, growing by 11,430 drams as compared with February and by
6,430 drams as compared with January which ensured an extra profit
of 32,318 drams a ton.