Georgian PM meets retail chains to discuss reducing food prices

Georgian Prime Minister Irakli Kobakhidze on Wednesday met with representatives of major retail chains at the governmental coordination commission on food prices, emphasising that economic growth should translate into tangible benefits for citizens and addressing high markups in the market.

In his remarks, Kobakhidze highlighted that while business freedom was essential for economic development and employment, it should not come at the expense of citizens.

“Business freedom is our main starting point, and naturally it has its advantages when businesses independently define their activities. This supports the economy and employment and is important in every respect. However, in this case, the social burden on the population has become so heavy that we decided, based on consultations, to try to introduce certain changes to the overall situation”, he said.

The Prime Minister noted that some price differences in the market were two to three times higher than they should be, with an average markup of 86 percent.

“In reality, there are cases where the difference in prices is double or even triple. Together with you, we want to discuss what can be done in this direction and how certain practices can be changed in order to achieve price reductions. Overall, according to our calculations, the average total markup is 86 percent. We believe that an 86% markup is quite high. Over the past five years, the number of markets in the country has doubled”, he noted.

Kobakhidze further highlighted that Georgia had 113 markets per 100,000 people - much higher than Germany or Austria - which contributed to elevated prices.

“In Georgia, there are 113 markets per 100,000 people, whereas in Germany the same figure is 45, and in Austria it is 62. In some countries, the figures are even lower. Naturally, this ultimately affects prices and places an additional burden on the population”, Kobakhidze concluded.

The Government plans to hold additional meetings with distributors and local producers, and the commission’s work will extend beyond food to address medicine and fuel prices.

The meeting was attended by up to 15 representatives of large retail grocery chain markets.