Economy, News

Price fixing in Georgian food and fuel market 

by | Aug 5, 2012

TBILISI, DFWatch – A new survey says that the fuel and food market in Georgia is an oligopoly. 

The new study presented by Transparency International Georgia (TI) on August 3 is called ‘Competition Policy in Georgia’ and deals with the fuel and food market segments.

Natia Kutivadze, one of the authors of the report, said that there is an oligopoly in the fuel and food market, and highlights the fact that there are few formal barriers in the Georgian economy.

According to the report, it is easy to notice the co-occurance of different companies’ price reductions and this may indicate that these companies have some commercial strategy.

The report notes that the fuel market tends to consolidate (the number of market players is decreasing) and the prices are increasing. In the period from 2006 to 2011, the share of medium-sized companies in the overall fuel retail market turnover has decreased from 20% to 7%, while the employment share of these companies decreased from 47% to 17%;

The researchers found some violations:

Data about fuel import from the Italian Customs Service and the Georgian Revenue Service differ significantly. A comparable discrepancy is observed in the fuel import data by the Bulgarian Customs Service and the Georgian Revenue Service.

The prices of meat and milk products are increasing in last period.

Georgia is highly dependent on food import, which is why the increase in food prices internationally from the second half of 2010 has put inflationary pressure on the Georgian food market. Food safety is the biggest problem in the meat market, which is exacerbated by food additives and lack of supervision, according to the report.

Transparency International Georgia recommends that the government develops the legislation better and improves the competition regulation system. The authors of the report think that in order to harmonize the Georgian market with the EU it is very important to regulate the market effective.



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