Tamar Udesiani, director of the retail chain Zgapari, told the Parliamentary Commission on Prices that the rise in supplier “cashback” payments is driven by competition among producers and importers, not by demands from retail networks. According to her, suppliers often offer additional bonuses themselves to push competing products off store shelves.
Udesiani explained that eliminating cashback schemes would not lead to cheaper products in the chain’s stores. She said retailers already factor cashback into pricing and often use those funds to offer discounts, meaning many fast-moving products are sold below acquisition cost thanks to cashback.
She added that the continuous growth in cashback payments reflects a mismatch between supply and demand. Many producers and importers enter the market without conducting proper research, resulting in several companies offering nearly identical products and aggressively competing for shelf space.
According to Udesiani, this rivalry drives suppliers to “fight a full-scale price war” by offering higher cashback incentives to retailers in exchange for exclusivity. Therefore, abolishing cashback would not reduce retail prices but would mainly disrupt existing pricing mechanisms.
