PM meets distribution companies within Cross-Government Coordination Commission on food prices

“It is important for us to strike the maximum possible balance between the interests of business and the population. We want everyone to work together to protect the interests of the public and, to the greatest extent possible, try to reduce prices,” stated Irakli Kobakhidze, Prime Minister of Georgia, at today’s meeting of the Cross-Government Coordination Commission on Food Prices, attended by representatives of distribution companies.

The Head of Government of Georgia noted that, according to preliminary research, the average markup in Georgia amounts to 86 per cent, which is quite high. The commission aims to determine, through discussions with relevant stakeholders, how the pricing chain functions and where there is room to reduce prices.

“Preliminary research shows that a fairly high markup is generated directly from Georgia’s border to the retail shelf, with an average markup of 86 per cent, which in our view is quite high. We looked into this issue. I personally saw, for example, that the markup from wholesale to shelf ranges from 20 to 30 per cent in Germany, which is a standard margin. Under these conditions, 86 per cent appears to be a very high figure. Of this 86 per cent, one share falls on distribution, 44 per cent, and the share is relatively smaller in the case of chain supermarkets.

Altogether, the 86 per cent leads to prices in Georgia being much higher compared to European prices. In some cases, prices are 50 per cent higher; in others, two to three times higher, meaning the difference is quite significant.

When a business operates at its own discretion, this naturally brings many positive aspects; however, the social dimension also plays a crucial role, which is equally important to us. It is important for us to balance these interests as much as possible, and together we want to take care of the interests of the population and try, as far as possible, to reduce prices,” added the Prime Minister of Georgia.

The Head of Government of Georgia emphasised that such meetings are important for the authorities to receive information directly from the sector on where they see problems and opportunities for reducing prices.

Along with the head of the Distributors’ Business Association, representatives of around 15 distribution companies attended the commission’s meeting.

Starting next week, similar meetings will be held with food producers, as well as on the prices of pharmaceutical products and fuel.