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Flour Milling Plant Outraged by a Delay in the Launch of Competition Agency

As reported, the head of the newly created Competition Agency George Barabadze told “Commersant” that he didn’t see  features of existence of monopolies in Georgia.

In response, President  of the Grain Growers Association of Georgia  Levan Silagava told “Commersant”  that the words of the head of the service were immoral, but expressed hope that the new Agency would conduct a market research.

“The competition is restricted on the  bread products market over 2 years, and if the new Agency is not launched  in the near future, it will affect the companies. Currently 60-70% of the market is controlled by the Azerbaijani company “Karat Holding.” Other companies – such as “Progress”, “Tbilisi”, TVT-Group”, etc., are forced to cut production, as the sales have sharply reduced. From time to time they even stop. The Antimonopoly Service must act in this situation – laws should be applied in order the competition to appear in this field  and one large company  not to be able to dominate in  the market ,”- said Silagava.

Apart from that, he  notes, in order to gain time, bylaws can be adopted that will increase competition in this sector. It would be desirable, as it is still unknown when the competition agency will be  staffed  and begin its work. This is expected to happen before the end of the year. In addition, a study on the specific issue will require around 6 months.

” The political will of the state is now the most important. In my opinion, such a will exists, since the state began to work in this direction, “- President of the Grain Growers Association adds.

According to Director of one of the flour  milling plants  Demur Kurdadze, the  antitrust laws have not yet come into force, and the market situation remains unchanged.

“Over the past two years the  sales fell by almost half. We used to sell 150 tons, now  only  50-70 tons. For this  reason, dozens of companies have already gone bankrupt and were forced to leave the market. This situation is still ongoing, and the threat of closure applies to all companies. The Azerbaijani company buys at a low price more than it needs, tens of thousands of tons of grain, while others may acquire no more than 3 000-3 500 tons. As a result, we work almost at a loss. We held a  meeting in the Ministry of Economy where were promised that the problem would be resolved in the near future “- the businessman says.

Representatives of “Karat-Holding”, which is the target of claims,  has not commented on the allegations against them.

Georgian Economy Minister Giorgi Kvirikashvili said after the establishment of the  Agency that in the first phase the new service would  eradicate monopolies,  destroy  cartel transactions and open a  market.