Some Georgian producers say that one of the biggest challenges in working with retail chains remains long payment terms for delivered products. The founder of “Achinebuli,” a natural juice producer, told BMG that retailers typically settle payments 45 to 90 days after goods are sold.
According to him, such lengthy payment terms create working-capital shortages for suppliers, forcing them to take on additional bank loans, which is especially difficult given that interest rates in Georgia now reach 15%. As a result, producers effectively finance retail networks while waiting months to receive payment for already delivered goods.
Founder Gocha Gvinepadze argues that Georgia needs legal regulation to reduce payment deadlines, but any reform must consider the interests of both sides. He notes that contracts between producers and large retail networks are asymmetric, with retailers holding most of the bargaining power, leaving smaller suppliers with no choice but to accept long payment cycles.
“There must be a golden middle ground,” Gvinepadze said. “Retailers cannot operate with a two-week payment term, that’s understandable. But it’s also unfair that producers must borrow money so that retail chains can continue expanding their networks. Payment terms must be reduced in a way that protects both retailers and local manufacturers.”
