“Business in our country enjoys a high degree of freedom; accordingly, price formation is based on free market principles. However, this is where our social responsibility to the population comes into play, and we believe that, based on this responsibility, we can make a certain contribution to reducing prices,” stated Irakli Kobakhidze, Prime Minister of Georgia, at today’s meeting of the Cross-Government Coordination Commission on food prices, which the Georgian producers have attended.

The Head of Government focused on the challenges related to the sale of locally-produced goods on the domestic market and spoke about the existing potential for price reductions.

“We have preliminary information indicating that the current rules of the game in the market, to some extent, hinder Georgian producers from ensuring the proper sale of their products within the country, in our chain supermarkets. Overall, the price markup from the Georgian border to the retail shelf amounts to 86%. This does not include any taxes, neither import duties nor VAT. This is a pure markup that occurs at the distribution stage and subsequently in chain supermarkets.

Accordingly, we believe that this markup is quite high. We have seen, for example, the difference between wholesale and shelf prices in European countries, where the markup typically ranges from 20% to 30%. Therefore, we believe that there is room for price reductions, including for Georgian products,” stated Irakli Kobakhidze.

Today’s meeting of the Commission was attended by representatives of up to 25 food production and processing companies operating in Georgia.

During the current week, meetings within the framework of the Cross-Government Coordination Commission will also be held on the prices of pharmaceutical products and fuel.