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Competition Agency Intends to Examine Flour and Pharmacy Markets

The Competition Agency has revealed the presence of cartel agreements on the Georgian fuel market and fined five largest oil companies 55 million GEL.

According to the expert, the next markets the Agency will examine will probably be flour and pharmaceutical markets.

“In regard to the oil companies, we are talking about a very large and complicated scheme, which allows them to keep prices inadequate. In reality this was due to the restriction of competition. In general, in recent years there has been a lot of talk about fuel prices in Georgia, including among experts, but only the Competition Agency has managed  to establish it. The mere fact of  the confirmation of cartel  agreements in the fuel market is very important, because the following procedure is to review the issue in court. If this is confirmed, the companies  await  a large fine. Of course, a fact that businessmen are forced to pay large, multi-million fines is unpleasant  but offenders who are trying through various machinations to keep high prices, should be held accountable, “- he says.

In his words, the study of the fuel market is also important as the new regulations which will provide competition in the country will enter into force.

“The Agency has studied the smaller sectors of the economy, but oil, flour and pharmaceutical markets were taboo topics. It was a feeling that the government knew about  monopolies  in these sectors, however, the study of the fuel market put an end to such suspicions. This will be a precedent that the government will not allow anyone to abuse its dominant position in the market. Although things could go differently, in response to the fines,  oil business can  hike prices, “- Levan Kalandadze says.

He notes that  now the Agency must examine the pharmaceutical and flour markets.

“The society  has high expectations with respect to these sectors. In Georgia, there are many different kinds of problems with the cartel deals, but fuel, pharmaceuticals and flour are the largest and most serious cases. Now the Competition Agency and the state as a whole are  facing a challenge – what will be the outcome of the case on the fuel market. It is a question of political will, the competence and qualifications, as well as  the depth of the analysis carried out by the Agency.

Now both the Agency and society are passing a certain test for maturity. Public opinion on this issue is also controversial, which is clearly visible in social networks. Many welcome the decision of the Competition Agency, others are more skeptical and accuse the authorities of putting pressure on the business. At the same time, international experience demonstrates that countries that have achieved rapid economic growth  managed  to do so largely due to the fact that the monopoly was liquidated and a high level of competition was  ensured. The market should be open to all, not only for 5-6 large companies,”- the expert notes.

He adds the country has to prove that it voluntarily joins  the system of values based on  ​​free  competition in the economy.