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A regulation issued by the Russian government banning foreigners from any type of retail activities in Russian markets has been abolished in Moscow, from yesterday, according to reports from Chinese Business News.

Published last December, the regulation forbids foreigners from selling alcohol and medicine in Russia from January, and bans them from any type of retail sales in Russian markets from April 1.

A municipal government official told local reporters that foreign retailers could return to markets from February 12 since the first phase of the ban had had a damaging impact upon retail markets.

But Chinese sellers have already felt the impact.

Many Chinese retailers had been forced to reduce their prices in the weeks leading up to the New Year as they prepared to move home prior to the new rules coming into effect. A large market in Moscow, previously dominated by Chinese merchants, was nearly closed.

The time it will take for Chinese sellers in Moscow to recover fully and whether other regions will follow Moscow's lead in relaxing the rules, the reports said.

Rules banning foreign retailers, approved by Russian President Vladimir Putin, were implemented to foster job opportunities for native Russians and to curb organized crime, the government said at the time.

The results went a little awry as prices for meat and vegetables spiraled up and Moscow markets saw a 70 percent vacancy rate. 

The gap left by the thousands of foreign retailers is far too large to be filled by local people. A stall once valued at US$20,000 is not struggling to for a tenth of the price, news reports said.

Nearly 60 percent of Russian citizens said they did not benefit from the ban as it affected products, prices and services.

(China Daily February 13, 2007)