Georgian Prime Minister Irakli Kobakhidze drew attention to rising food prices and recorded a video address to the people, promising to "sort it out" and punish those responsible, UNN reports with reference to Novosti Georgia.
"The difference between Georgian and European prices is indeed quite large," Kobakhidze admitted.
He said that the government conducted a study: they compared prices for key products in Georgia and European countries, and came to sad conclusions.
"If we compare prices in chain stores of the same international brand in Georgia and France, a certain brand of oil in Georgia is 34% more expensive, pasta - 97%, rice - 180%, butter - 30%, cheese - 42%, and chocolate - 42%. The difference in prices is due to high markups of distribution companies and stores, which average 86% from the Georgian border to the counter," Kobakhidze said.
And the net profitability of individual retail chains in Georgia, according to the prime minister, is 7, 8, and even 14%, while in Europe it averages 2%.
Kobakhidze also drew attention to the "rapid expansion of retail chains" in Georgia amid high profitability. According to him, over the past 5 years, the number of chain stores in the country has doubled. As a result, today in Georgia there are 113 stores per 100,000 people, in Germany this figure is 45, and in Austria - 62. The costs associated with the expansion of networks directly affect product prices, Kobakhidze believes.
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"I call on law enforcement agencies to conduct an in-depth study of the issue and determine whether there are signs of criminal offenses in the activities of specific individuals... The current practice raises suspicions that market participants could have acted in concert, on the basis of a cartel principle, which, naturally, requires additional analysis...", Kobakhidze said.
He proposed that parliament create a commission to study the issue. At the same time, the prime minister promised that the government would actively cooperate with distribution companies to reduce prices.
The publication writes that earlier the National Statistics Service reported that in November, annual inflation in Georgia was 4.8% against a target of 3%. The largest impact on price growth was the food group, +10.3% year-on-year.
Rising prices came first among the problems cited by participants from Georgia in the latest Eurobarometer survey.