Magnit to restrict maximum markup on socially important products

Krasnodar, Russia (January 12, 2022): Magnit PJSC (MOEX and LSE: MGNT; the Company, Magnit), one of Russia’s leading retailers, plans to introduce voluntary markup restrictions for a specific list of socially important products. The Company has already submitted the corresponding letter to the Federal Antimonopoly Service of Russia (FAS) to have the initiative evaluated fr om a legal perspective. Magnit regards voluntary markup restrictions as a mechanism that would ease the inflationary pressure on the incomes of Russian residents.

The initiative will limit the maximum markup on essential goods at the level of no more than 10%; the minimum level of markup will not be restricted. The restrictions are expected to cover around 200 articles spanning 25 categories that form the basic food basket of Russian consumers, including pasta, basic vegetables (so-called “borscht vegetables”), bread, milk, butter, buckwheat groats, and other items. The share of goods that will fall under the provisions of voluntary markup restriction may reach 30–40% of Magnit’s overall sales of socially important products in value terms.

The initiative was developed as a result of a number of meetings with FAS wh ere the latter proposed to consider implementing additional mechanisms for responsible pricing aimed at voluntary restriction of markup on socially important foods.

After a formal approval by FAS, the voluntary markup restrictions will be implemented until the end of 2022. The Company will use special price tags to highlight the products covered by the restrictions on its shelves.

Jan Dunning, President, CEO of Magnit:

"We have traditionally been setting the lowest possible markups on socially important products and introduced zero-level markup for the basic assortment on numerous occasions over the past few years. Nevertheless, due to the noticeable increase in inflation rates, Magnit has, together with FAS and the Ministry of Industry and Trade, developed additional measures to mitigate the inflationary pressure. The introduction of voluntary markup restrictions for a fairly broad range of socially important products will allow us to provide targeted assistance to those Russian residents who actually need it without disrupting the market mechanisms well established in retail”.