Georgia’s Minister of Economy and Sustainable Development, Mariam Kvrivishvili, has placed renewed emphasis on the role that fees and charges imposed by large supermarket chains play in driving up the cost of food for consumers, a factor she says has outpaced the impact of state taxation.
Speaking on national television, Kvrivishvili said that the government’s detailed analysis of food price formation shows that while the state levies six types of taxes on goods, major retail chains add up to nine additional charges once products enter the domestic market. These additional fees, she said, are ultimately passed on to customers at the checkout, contributing significantly to higher prices at the shelf.
“The government’s breakdown of the pricing chain reveals that approximately 86 percent of price increases occur after goods cross the border and before they reach supermarket shelves,” Kvrivishvili explained, highlighting nine distinct cost components in this segment of the supply chain that are driving up retail prices.
According to the National Statistics Office of Georgia (Geostat), nationwide inflation data reinforce these concerns: food and non-alcoholic beverages remain the primary drivers of rising consumer prices.
In January 2026, food prices rose by 10.6 percent year on year, contributing strongly to the overall inflation rate of 4.8 percent, while monthly inflation jumped 1.2 percent, the highest monthly rise in several years. Vegetables alone climbed more than 12 percent in January, with other staples including fruit, dairy, meat, and sugar also posting notable increases.
Kvrivishvili stressed that her ministry’s review was carried out transparently and included input from all major stakeholders, including importers, producers, distributors, and retailers, not just the government.
Yet the minister also warned that the financial burden of supermarket charges is squeezing local producers, limiting their ability to compete.
“These extra charges restrict access for Georgian products in major retail chains,” she said, noting that domestic goods are often priced out of supermarket shelves in favor of imports because of higher cost burdens in distribution and retail. Reducing the consumer burden and expanding shelf space for Georgian-made products remains a central government priority, she added, calling on large retailers to engage in “open and balanced dialogue” to find solutions that support both affordability and local production.
Political and Investigative Push on Pricing Practices
Public debate over food pricing in Georgia first intensified on 24 December 2025, when Prime Minister Irakli Kobakhidze publicly announced an in-depth investigation into how retail prices are formed, responding to growing concern among citizens about expensive groceries.
Kobakhidze has repeatedly highlighted sharp price differences between Georgia and European countries for identical products, such as sunflower oil, pasta, rice, and chocolate, all of which he said are substantially less expensive in France and other EU states. He attributed much of the gap to high mark-ups applied by distributors and supermarkets, which he estimates average 86 percent between the point of entry into Georgia and sale to consumers.
“Business in our country enjoys a high degree of freedom, and price formation is based on free market principles. At the same time, we have a social responsibility to the population, and within this framework, we believe we can contribute to reducing prices,” Kobakhidze said.
To look into these issues, the Georgian Parliament established a Temporary Parliamentary Commission on the Pricing of Food, Medicines, and Fuel, led by Shota Berekashvili, which is set to conduct hearings with sector representatives and explore ways to enhance competitiveness in key markets. The commission’s mandate will run initially through a three-month period, aiming to produce policy recommendations to address perceived imbalances in the pricing chain.
At the same time, the State Security Service of Georgia (SSSG) has confirmed ongoing investigations into retail chains’ price formation practices. Authorities have obtained contracts, accounting records, and other documentation from several companies under court order, emphasizing that the inquiry is strictly focused on pricing behavior, not a general financial audit.
Retail industry associations, while cooperating with requests, have called for clarity and transparency in government communication to prevent market uncertainty.
Government Coordination and Wider Economic Context
In addition to the parliamentary commission, the government has launched a Cross-Government Coordination Commission on Food Prices, chaired by Prime Minister Kobakhidze, bringing together key ministries and regulatory agencies, including the Ministry of Finance, the Competition and Consumer Protection Agency, and the Ministry of Agriculture. Discussions within this framework are expected to focus on price formation challenges, distribution practices, and strengthening the domestic food sector.
Officials have also highlighted that Georgia now has a relatively high density of chain supermarkets, more than double that of some European countries, potentially amplifying competitive effects and cost pressures on suppliers and small producers. Local political figures, including Tbilisi’s mayor, have echoed concerns about the disproportionate impact of rising food prices on vulnerable population groups.
Tbilisi Mayor Kakha Kaladze said, “This issue directly impacts our population, especially those who are most in need and require support. Regulating prices is one of the state’s priorities, and this issue will be resolved very soon.”
As inflation data continue to show strong upward pressure on food prices and monthly price increases outpace broader index movements, Georgia’s government is placing major retail chains at the center of its analysis and policy response.
At a January meeting of the Cross-Government Coordination Commission on Food Prices, government officials held discussions with Georgian producers to address price formation, supply-chain challenges, and the need to strengthen local production.
Levan Zhorzholiani, Head of the Government Administration, said the session focused on difficulties producers face in their dealings with large retail chains and distributors, particularly issues related to pricing, margins, and access to shelf space.
Zhorzholiani said there was broad consensus among participants that food prices can be reduced under the current conditions, provided that relationships between producers, distributors, and retailers become more balanced.
“The producers also emphasized how important it is to promote Georgian products,” he noted. “In many cases today, local manufacturers prefer to export their goods rather than sell them on the domestic market, as the existing environment often makes exports more attractive. We discussed what steps can be taken to improve this situation.”
The meeting forms part of the government’s broader effort to address rising food prices through coordination across state institutions and dialogue with market participants. Previous sessions of the commission have involved retailers and importers, while the latest discussions aimed to incorporate the perspective of domestic producers and assess systemic obstacles affecting local supply.
Officials say further consultations are planned, with the goal of developing concrete measures to encourage domestic sales of Georgian-made products, reduce costs across the supply chain, and ultimately ease price pressure on consumers.
By Team GT
