Despite high raw milk prices in Georgia, large-scale investment is not flowing into the dairy sector, according to Kakha Koniashvili, head of the Dairy Producers Association. He says unfair competition and weak market oversight are discouraging investors from entering the industry.
Speaking to Business Course, Koniashvili noted that investors see significant risks, as businesses that comply with standards must compete with market participants that operate outside regulatory requirements, making returns on investment uncertain.
He added that quality concerns are concentrated in the largely uncontrolled primary production segment rather than among large farms and processors, which are subject to strict inspections. Products supplied to small shops and the HoReCa sector often lack effective monitoring, raising questions about quality and safety.
The association is also skeptical that new labeling rules alone will boost demand for locally produced raw milk. Koniashvili argues that stronger market controls and targeted state support programs, including financing and co-financing for farmers, are needed to increase domestic milk production. He also noted that businesses still lack detailed information about the government's revised co-financing program.
