Gov’t Administration Head flags ‘cashback’ fees as key issue after talks with food sector

Levan Zhorzholiani, Head of the Georgian Government Administration, has said that so-called “cashback” fees imposed by retail chains emerged as one of the most acute problems during meetings with supermarket representatives, distributors and producers.

Speaking on the First Channel, Zhorzholiani said the discussions brought together all three sides involved in shaping food prices - retail chains, distributors and manufacturers.

“As it emerged, one of the sharpest problems concerns so-called cashback payments, when a distributor or producer is subject to certain types of charges set by retail chains,” he said.

Zhorzholiani added distributors and manufacturers as well report that they face up to nine different types of such fees imposed by large retail networks.

“The state has only five types of taxes in total, which is how the budget is filled. They name this as one of the main problems,” he noted.

He added that some Georgian producers prefer exporting their goods rather than selling on the domestic market. While exports are positive, he said, they are beneficial only when internal demand is fully met and the local market does not need to rely on imports to fill gaps.