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Delay of Soft Drinks Labeling Encourages Business

The founder of the company Coca-Cola Bottlers Georgia Temur Chkonia hails  the Prime Minister’s decision about the postponement of the introduction of labeling  for alcoholic beverages.

According to him, the Prime Minister took time out, and if he looks into the matter in more detail, it is likely this decision will not be taken. “The head of government will examine this issue,  will probably  meet with us, and I hope that the government will take the right decision. In this case we are talking about the interests of the state rather than  business,” – Chkonia notes.

Caesar Chocheli, a  founder of the company Zedazeni, is  satisfied with the Prime Minister’s  initiative. “The problem is that often hasty and ill-considered decisions are made that harm the business, in particular, the increase in excise duties on beer. It would be nice if these questions were studied in advance. Each regulation must first be evaluated in terms of the interests of the state and business, and only  then adopted, “- the businessman says.

According to him, if the government still decides to introduce a system of labeling, all expenses must be covered by the state, and should not be a heavy burden on business. Georgia Beverage Association’s position is tougher, the organization  believes  that the government should completely cancel the new regulation. “When it became aware of the initiative to introduce a new regulation, we announced that it will lead to price hikes, declining competitiveness compared with imports that will cause deterioration in the business climate and reduce the inflow of investments into the sector.

Note: The authorities wanted  the mandatory labeling  the business has been struggling  with for almost 5 years to come into effect  in the  coming months. As they say, at this stage all expenses will be covered by the Revenue Department. The government  does  not specify whether the business will have to pay all the costs in the near future, while the businessmen do not doubt that the events will develop under this scenario.

Finance Minister Nodar Khaduri  gives the example of the neighboring Armenia as the argument, where water, Coca Cola and other soft drinks are labeled.  As for the financing of the project, the Minister notes  that the funds at this point will be paid by the Revenue Department and not from the  budget. We wrote earlier that  the original version that envisaged the imposition of  all expenditures for  marking system on business would  lead to a rise in price of the products, reduced competitiveness of the Georgian products, suspension of investments and business environment deterioration.

However, allocation of funds from the state budget to cover the costs for  the introduction of the electronic marking system may also cause  severe problems. In a time when the country is trying to minimize the administrative and other costs, to pay millions for service that doesn’t maintain any criticism in  costs efficiency  and optimal financial estimates is tantamount to the embezzlement of state funds.

At the same time, budget funds outflow abroad will reflect badly on the country’s economic situation and will further undermine  the stability of the lari exchange rate which without any additional factors reacts very sensitive to such  processes.