Prime Minister Irakli Kobakhidze met with Georgian producers at a session of the Cross-Government Coordination Commission on Food Prices, focusing on price formation, market practices, and challenges facing local manufacturers.
Addressing the meeting, Kobakhidze stressed that business in Georgia operates under free-market principles, but emphasized the government’s social responsibility to contribute to easing the burden on 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,” the Prime Minister said.
He highlighted difficulties related to the domestic sale of Georgian-made products, particularly in large retail chains, and pointed to significant price markups along the supply chain.
“Based on our preliminary information, the current market rules, to some extent, prevent Georgian producers from properly selling their products domestically, especially in chain supermarkets. From the Georgian border to the retail shelf, the price markup reaches 86%. This figure excludes all taxes, including import duties and VAT, and reflects purely distribution- and retail-level markups,” Kobakhidze noted.
He added that such margins are considerably higher than those observed in many European countries, where the difference between wholesale and shelf prices typically ranges from 20% to 30%.
“This indicates that there is real potential for price reductions, including for Georgian products,” the Prime Minister said.
The meeting was attended by representatives of up to 25 food production and processing companies operating in Georgia. Government says further discussions within the framework of the Cross-Government Coordination Commission are planned this week, including separate meetings focused on pharmaceutical and fuel prices.
Image: Government Administration
