PM announces bill on fair trade to combat high prices on food, oil

  • The PM on Monday said the new bill was expected to reduce inflation. Photo: Government press office, 20 Feb 2023 - 16:02, Tbilisi,Georgia

Georgian Prime Minister Irakli Garibashvili on Monday said he had instructed the country’s Economy Ministry to draft a bill to ensure reduction in domestic prices on food and oil.

Garibashvili said the legislative initiative would be “related to the European directive on fair trade”, with the bill coming following the PM’s criticism earlier this month of prices set by domestic oil and food importers for ensuring “very high profits”, in contrast to the “real cost” of the products.

The Government head had instructed several ministers to set up a working group to negotiate a reduction in the prices, with the latest comment coming after the weekly Government meeting and clarifying the bill is expected to define margins and prices, with retails also offering predefined rules.

Garibashvili noted “intensive meetings” with importers, large business networks and retail owners over the past two weeks had triggered “serious question marks” over the retail rules that could cause increases in prices. 

PM discussed high prices for various products with his Cabinet on Monday. Photo: Governnet press office.

“At the meetings, importers explained that 70-80 percent of the profit was not theirs and the question was related to the rules of retail. [...] there are legitimate question marks [how fair the rules can be]. Such rules do not apply in Europe. This question is regulated there”, the PM said. 

He also noted the bill would be discussed with “all interested parties” and said he hoped the Parliament would approve it to facilitate lower inflation and “ease the circumstances” for the country’s population. 

Pointing to the 9.4 percent inflation rate last month, Garibashvili noted 6.1 percent of the figure had been triggered by food prices. 

“We can assume that once these matters are settled - and it could happen very soon - inflation will also come down to approximately five percent”, he said. 

In comments about oil prices, the PM said meetings with large importers had revealed prices were “unreasonable” and that the businesses had pledged to ensure their reduction. He added the Government could intervene if the importers failed to keep the promises.

“This may happen by setting upper margins [for prices], like in European states. However, we do not want to do this, and I hope there will be no need to take this action”, Garibashvili added, noting his office worked to ensure “best ways possible” to address such problems and refrained from “sharp interference in business activities”, which he said was “not in our practice”.