Retail expert Miranda Manjgaladze commented on Prime Minister Irakli Kobakhidze’s statements about high food prices in Georgia, noting that while she welcomes his concern for the public, some of his claims were overly broad. She emphasizes that high prices have underlying causes that require detailed analysis beyond what was presented in the video statement.
Manjgaladze highlighted that the net profits cited by the Prime Minister, ranging from 7% to 14%, need more context. She explained that EBITDA, a key measure used internationally to compare companies’ operational efficiency, shows Georgian retail chains trailing European benchmarks. EBITDA for Georgian companies is around 3%, compared to 5% in Europe, indicating room for operational improvements rather than evidence of excessive profits.
She also pointed out that net profit figures include debt servicing and taxes, and that differences in product weight, brand, and barcode make comparisons complex. According to Manjgaladze, it would be more transparent to clarify which products were analyzed and how the 14% figure was derived, rather than presenting it as a general benchmark for the sector.
Finally, Manjgaladze suggested that targeted tax incentives could be a more effective tool to reduce food prices for essential products, such as dairy, without broadly affecting other goods. She cited Poland’s post-COVID VAT reforms as an example, where lowering taxes on critical food items successfully reduced retail prices, while less essential products retained higher tax rates.
