PM urges balance between business and consumers as food prices reviewed

The Georgian government on Friday said it is seeking to balance the interests of businesses and consumers as it reviews rising food prices, Prime Minister Irakli Kobakhidze has said.

Speaking at a meeting of the government’s coordinating commission on food prices, Kobakhidze said preliminary research showed that average price mark-ups in Georgia reach 86%, a figure he described as high. Representatives of distribution companies attended the meeting.

According to the prime minister, the research indicates that price increases occur mainly between the country’s borders and retail shelves. He said that in countries such as Germany, mark-ups from wholesale to retail typically range between 20% and 30%.

Kobakhidze said that of the total 86% mark-up identified in Georgia, around 44% is attributed to distribution, with a smaller share linked to retail chains. He said this contributes to food prices in Georgia being significantly higher than in Europe, in some cases by 50%, and in others by two or even three times.

He said that while businesses operating freely bring many positive outcomes, social considerations must also be taken into account. The government’s goal, he said, is to identify where price-setting mechanisms allow room for reductions and to work with all stakeholders to lower prices as much as possible.

Kobakhidze added that meetings with sector representatives are essential for understanding where businesses themselves see problems and opportunities for reducing costs.

The meeting was attended by the head of the Distributors’ Business Association and representatives of around 15 distribution companies.

The Head of the Government Administration, Levan Zhorzholiani, said that there was readiness on all sides for active cooperation. He said discussions focused on the price formation chain from the country’s borders to store shelves, and that views were exchanged on how mark-ups are formed.

Zhorzholiani said both distribution companies and retail chains had expressed willingness to work with the government to reduce prices. He described the dialogue as constructive and said similar openness had been shown in previous meetings with supermarket chains.