Home / Business / Georgian Prime Minister Instructed Finance Minister to Postpone Mandatory Labeling of Non-alcoholic Beverages

Georgian Prime Minister Instructed Finance Minister to Postpone Mandatory Labeling of Non-alcoholic Beverages

Prime Minister of Georgia Irakli Garibashvili instructs Finance Minister Nodar Khaduri to postpone compulsory labeling   of non- alcoholic beverages.

“Manufacturers of alcoholic beverages have asked the Prime Minister of Georgia Irakli Garibashvili to defer the mandatory labeling of the products. Ministry of Finance prepared a draft, according to which the labeling of carbonated, mineral and fresh drinks becomes mandatory from September 1.Companies asked to postpone that date in view of the summer season and the complexities associated with the deployment of the necessary marking equipment. The Prime Minister takes into account the request of manufacturers of soft drinks and instructs the Minister of Finance to postpone the mandatory labeling till  1 November 2015 “, – a statement  released by the press service of the government of Georgia reads.

Not: 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. Recall that in order to establish highly secured track and trace system, GRS has announced a competition on “Integrated System of Movement and Registration of Products” on 10th November, 2011. Seven bids were submitted from the companies; the requirements of GRS were met by “SICPA Security Solutions SA”.

The agreement was concluded between Georgia Revenue Service and “SICPA Security Solutions SA”. The main purpose of Georgia Revenue Service was to establish electronic system as it allows controlling accuracy of the payment process; in addition, consumers are protected from using counterfeit goods.

The system offered by Swiss company allows marking the production by means of unique secured code which could be applied on excise stamps or directly on the production. The movement of the production through manufacturing line is controlled by the devices produced by the company; these devices provide identification and marking of production; quality control of applied stamps and activation of unique secured code through database.

The information collects and transfers via special device, automatically. It could be mentioned, that during the quality control process of applied stamps, in case of detecting defected stamp, product is pushed out from manufacturing line; this leads to significant simplification of calculating process of manufacturing defects, ensuring continuous production process.

The previous government sais that that implementing new marking system would give a possibility to apply paper-based label and on-product marking on excise and non-excise products; to establish Data Management System (DMS), to receive information about marking local or imported products in real time; to control/monitoring circulation of goods on consumer market and calculation/reduction of manufacturing defects in local enterprises.