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A Number of Mills Halted Operations due to the Lari Devaluation and Dumped Prices

A number of Georgian mills were forced to halt  operations due to the lari devaluation and dumped prices offered by new companies in the market, some of them are operating at half capacity. CBW was told by Levan Silagava, Chairman of Grain Growers Association.

He says  that before the  new year price of one bag of  flour was 37 GEL, but today a bag of flour costs 43-44 GEL, the price difference is a result of the devaluation. However, Silagava notes that the price of flour has not increased in direct proportion to the devaluation that affected the mills. In his words, if the price was set  in direct proportion to the devaluation,  a bag of flour would  cost 49 GEL.

“We’ve managed to keep the price at the expense of supplies, prices  in Russia have also  reduced. We were able to bring in supplies during these  2 months that  allowed to  stabilize  the price and  gave  us some benefits. All mills could not do it, some are working at half capacity, some have stopped”, Silagava explains.

According to him, Tbilisi and Barzo mills  as well as  the Tibiti group factory have halted operations. Levan Silagava says  that some of the mills are  working at a loss in order  not to lose clients.

The second major problem, in Silagava’s words, is the  Russian flour  import at dumped  price. Based on the above, Silagava demands to impose the anti-dumping duties. According to him, the law has been submitted to Parliament and deputies even promised to discuss it in September. Antidumping law work has been going on for several months. Last December, the Economic Policy Committee Zurab Tkemaladze said that the law would be discussed at the spring session, however, the legislature still has not discussed it.

Zurab Tkemaladze, Chairman of the  Sector Economy and Economic Policy Committee told CBW in May that they were waiting a  response from the Ministry.

Minister of Economy George Kvirikashvili stated in January that  the aim of the  law is to protect the local industry from unfair competition. Deputy Prime Minister said that the legislation would not be acceptable to everyone, and may be inappropriate for importers but significant for local manufacturers.