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Competition Agency Intends to Continue to Examine Various Sectors of the Economy

As reported, the Competition Agency has recently published a study on the oil market  of  Georgia, which showed the presence of the  cartel deals on price regulation by the 5 largest companies  which were fined a total of GEL 55 million.

It was reported  that in the near future the Agency intends to explore other markets, about which there is suspicion of the existence of monopolies or cartels – such as pharmaceuticals and flour market. To date, the Agency on its own initiative examines the state of the market of aviation fuel and wheat, as well as the activity of oil terminals in the sea ports. Based on the request,  the Agency explores the LPG and flour markets. In addition, the legality of procurement of special equipment  by local authorities and compliance with competition law are being studied.

It is possible that the Agency will show interest in other sectors of the economy – according to experts, namely  communication, especially Internet service providers in respect of which there is a serious suspicion of the presence of cartel collusion between the major players in the market. However, the most realistic at the moment is a survey of  markets of wheat and  flour, the study of which has been rescheduled for October.

The Agency began studying the flour market six months ago because of the complaint of Georgian producers about the  Azerbaijani company Karat Holding, which was  accused of unfair competition and abuse of the available opportunities. According to Levan Silagava, President of  the Association of Bakery Producers, the report should be ready within 3 months, but because of the complexity of the issue, the Agency received the right to conduct a study for 1 year.

“Nevertheless, the beginning of the study has already brought tangible benefits – Karat Holding started to work in compliance with the law, the situation  has been resolved, and new companies began operating. As a result,  if earlier the Azerbaijani company controlled 75% of the market of Georgia, now –  only 35%. Now the situation on the market is improving, but nevertheless, the study should be continued to ensure that Karat Holding held accountable for its actions in the past,” – he notes.

The expert Levan Kalandadze believes that  the research  conducted by the  Competition Agency  is of great  importance as  the  antitrust regulation , which should ensure free competition in the country, has actually become effective  in Georgia.

“The Agency has already examined a number of relatively small markets, but the three largest – oil, pharmaceutical and flour – were  almost taboo. It was  a feeling that the state specially patronized the  players in these sectors, but a study conducted in the fuel market dispelled  these doubts. Now, the Agency must continue to work actively and explore pharmaceuticals and flour markets. In society, there is a great demand. There are many different sectors of the economy which could be a monopoly or cartel, but fuel, medicines and flour are  the largest and most important  that apply to all, without exception,” – the expert concludes.