As part of its ongoing monitoring efforts, the Georgian Competition and Consumer Agency (GCCA) is releasing an interim report on the FMCG market. According to the Agency’s annual report, in 2024, the retail volume of the FMCG market reached 12,792,211,332 GEL (excluding VAT), marking a 6.75% increase compared to the same figure in 2023, which was 11,983,346,244 GEL.
At the retail level, the market remained moderately concentrated in 2024, with a concentration index of 706, slightly exceeding the 2023 index of 397. There was no dominant player within the retail segment of the market, nor did the market meet the necessary conditions for the existence of group dominance, such as the distribution of market shares.
In 2024, at the retail level of the FMCG market, the combined market share of the three largest companies stood at 31.9%, up from 29.9% in 2023. The top five companies accounted for 44.2% of the market (compared to 40.6% in 2023), while the ten largest companies collectively held a 55.5% share (up from 50.1% in 2023). The overall share of the organized segment of the market reached 58.4%.
In recent years, the market has experienced both the consolidation and expansion of retail chains, along with the entry of new market participants, with growth accelerating particularly in regional areas. The share of the organized market continues to grow dynamically.
At the retail level of the FMCG market, a critical issue is the imposition of various indirect fees by retailers on distributors. These include cashback, entry fees for joining a chain or launching new stores, shelf placement fees, marketing contributions, and other charges. Among these, cashback has the most significant effect on retail prices. Distributors remit cashback as a percentage of the price of the supplied products. The trend in cashback percentages is increasing for a variety of products. For instance, for 0.5-liter bottled water, the cashback rate has increased from 22% to 33%; for a pack of 10 eggs, from 20% to 24%; for 1 liter of sunflower oil, from 8% to 15%; for 200g of butter (82%), from 25% to 34%; and for 1 liter of milk and 400g of Matsoni, from 14% to 25%.
While the cashback range for similar products varies at the distributor and retailer levels, the final retail price remains relatively consistent. Specifically, a lower cashback rate is typically offset by a higher retail markup, whereas a higher cashback rate corresponds to a lower retail markup. Consequently, this pricing mechanism results in comparable retail prices for identical products across different retail chains.
Key Information: The determination of market size, active companies, and their respective market shares was based on data from the National Statistics Office of Georgia and the Revenue Service of the Ministry of Finance, specifically including value-added tax declarations and turnover data from registered control cash registers. It is important to note that the market size does not include products sold through retail pharmacies.
