Following a statement by Prime Minister Irakli Kobakhidze about high food prices in Georgia, the country’s State Security Service (SSG) has announced an inquiry into the matter.
In Wednesday’s video address, Kobakhidze blamed high margins charged by distributors and retail chains while discussing the prices, and called on law enforcement agencies to examine whether there are any ‘signs of criminal activity’ involved.
That same evening, deputy SSG head Lasha Maghradze said the agency ‘is beginning a detailed review of the matter within its competence’.
‘Appropriate strict legal measures will follow any unlawful actions that harm the interests of Georgian citizens and our country’s economic security’, he added.
In the video address, Kobakhidze acknowledged a ‘considerable difference’ between Georgian and European prices, citing the price gaps between the same international chains in Georgia and France as an example. According to him, a specific brand of sunflower oil is 34% more expensive in Georgia, pasta 97% higher, and rice 140% more.
Kobakhidze claimed that the price gap is driven by ‘high markups from distributors and retailers, which average 86% from Georgia’s border to the shelf’.
‘Research shows that retail chains in Georgia have much higher profits than in Europe. Specifically, the net profit margins of certain Georgian chains are 7%, 8%, and 14%, compared to an average of 2% in Europe’, he added.
In his words, ‘the existing practice raises suspicions that market players may be acting in concert, following cartel-like principles, which requires further analysis’.
He pledged to work with distributors and retail chains to lower prices and, ‘if necessary’, implement ‘anti-monopoly mechanisms tested in other countries’.
Additionally, Kobakhidze hinted at possible intervention by law enforcement, urging authorities to investigate whether ‘signs of criminal activity appear in the operations of certain entities’.
He also called on parliament to establish a commission to examine the issue. Parliamentary Speaker Shalva Papuashvili agreed, announcing that the commission would be formed at the start of the spring session.
Although high food prices have long been a topic of discussion in Georgia, the causes and solutions highlighted by Kobakhidze sparked debate, with some noting that the government may be using high prices as a pretext to increase pressure on the business industry.
The ruling party has previously discussed state intervention in product prices. In 2023, while in office, former Prime Minister Irakli Gharibashvili — now charged for alleged money laundering — proposed setting margins and markups for importers and establishing rules for retailers while he was in office.
Gharibashvili planned to task the Economy Ministry with drafting a bill, but the process did not progress far.
Mikheil Gvadzabia
