“Markup in Georgia’s trade supply chains is quite substantial. The average markup from the cost of products to retail outlets is approximately 90%, and it can double or even more, excluding VAT for individual items,” stated Deputy Minister of Economy and Sustainable Development Vakhtang Tsintsadze.

Today, Prime Minister Irakli Kobakhidze addressed the issue of high product markups in Georgia and the financial burden placed on suppliers. According to the Prime Minister, studies reveal that the profit margins of retail chains in Georgia are significantly higher than those in Europe. Specifically, the net profit margins of certain retail chains in Georgia range from 7 to 14 per cent, whereas the average in Europe stands at around 2 per cent.

The Deputy Minister also highlighted the notable price disparity between Georgian and European online markets. Vakhtang Tsintsadze highlighted that the cost of comparable products in Georgia ranges from 20% to 180% higher than in European online marketplaces.

Furthermore, the Deputy Minister emphasised that local producers encounter significant challenges in entering online markets, chiefly due to the contractual conditions imposed by these platforms.

“This challenge is not new and is not unique to Georgia; similar issues have existed across various European countries. Many nations have responded with appropriate mechanisms. Our goal is to thoroughly study this issue to develop effective solutions to address it,” the Deputy Minister of Economy emphasised.