MP Berekashvili calls for fairer contracts to address retail market imbalance

The chairman of a parliamentary commission studying pricing structures in food, pharmaceuticals and fuel, Shota Berekashvili, has warned that imbalances between retail chains and suppliers can increase costs across the supply chain.

Speaking at a commission session on Monday, Berekashvili said asymmetrical relationships - where one side holds a significant advantage - can impose additional financial burdens on smaller producers and suppliers.

“These additional costs ultimately translate into higher production costs,” he said, noting that long payment terms, such as 60- or 90-day consignment agreements, increased suppliers’ working capital needs and can push up product prices.

Berekashvili said the commission aims to introduce a degree of standardisation in contractual relationships within the sector to ensure fairness across the supply chain and improve monitoring.

“Our goal is to make the sector healthier, more transparent and easier to understand, which will positively affect competition,” he said, adding that retailers should take greater responsibility for products they choose to place on their shelves.

During the same session, Archil Gegenava, co-founder of Daily Group, said the company supported efforts to increase transparency and regulate contractual relations between retailers and suppliers. He added that the retailer’s average margin on sugar within its group stands at about 4.6%.