Georgian PM announces measures to address high consumer prices

Georgian Prime Minister Irakli Kobakhidze on Wednesday said his Government would work actively with distribution companies and retail chains to achieve price reductions for citizens.

In a video address on consumer prices, Kobakhidze noted that his Government was ready to use anti-monopoly mechanisms that have been tested in other countries if necessary to curb high prices and protect consumers.

“I urge law enforcement bodies to study the matter in depth and determine whether there are signs of criminal offenses in the activities of specific entities. I also ask the Parliament of Georgia to establish a parliamentary commission that will use appropriate parliamentary mechanisms to assess the situation”, the PM said.

Kobakhidze further cited the research showing that the financial profits of retail chains in Georgia were significantly higher than those in Europe, specifically, the net profit margins of certain retail chains in the country were reaching as high as 7%, 8%, and even 14%, whereas in Europe, their average net profit margin was around 2%.

“It is also important to consider that operating costs for markets in Europe - such as rent, labor wages, utilities, and other expenses - are much higher. Furthermore, the net profit margins of distributor companies are also very high, typically ranging from 6% to 13.5% in Georgia”, he noted.

The Government head added that the price markup on products and the financial burden placed on suppliers were so high that it was often more profitable for Georgian producers to export their products abroad rather than sell them in Georgian markets.