Corporate Strategies and Consumer Prices in Developing Countries
Edited by Lahcen Achy and Susan Joekes
Chapter 3: The consumer goods distribution sector in Armenia
The Republic of Armenia is a territorially small, economically open, landlocked country with a population of approximately 3 million. Once the economic shocks of the early 1990s caused by the collapse of the Soviet Union were over, the Armenian economy grew very fast. It recorded annual average rates of growth of 5 per cent from 1994 to 2000 and 11 per cent from 2001 to 2008, although it was then badly hit in 2009 by the global financial crisis. Some observers claim that the economy’s ability to recover a sustainable growth path is dependent on the adoption of further reforms, including to competition policy, to improve the functioning of the market economy (World Bank 2006). The economy is highly trade-dependent. In many basic consumer goods markets there is limited domestic production capacity. Some major products – including final goods such as vegetable oil, butter, sugar and rice and ingredients such as wheat for the making of bread and pasta by local processors – are imported. The difference between world (import) product prices and the cost of living for consumers is determined by the operational efficiency of and by the margins obtained by processors and by market actors (wholesalers and distributors) in the distribution sector.
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