Georgia may introduce a new legislative framework to regulate relations between market participants. This involves the potential implementation of the EU Directive on Unfair Trading Practices.
“There is a European Union directive on unfair trading practices. Within its framework, a corresponding bill should be submitted to parliament; parliament must review it and create an institutional framework for relations between companies operating in this sector,” stated Shota Berekashvili, Chairman of the Price Regulation Commission, during a meeting of the commission.
“Our recommendation is that, under this directive, a relevant bill be introduced to parliament to establish an institutional basis for interaction between companies in this sector. This is a medium-term prospect. The sector is very large—it accounts for about 21% of our economy—and any aggressive intervention creates systemic risks. These systemic risks, in turn, would affect the economy as a whole.
The approach here must be highly targeted and meticulously detailed. Specifically regarding the directive on unfair trading practices, a corresponding document needs to be developed at the legislative level. This will take some time, and that is our recommendation. An implementation period will also be necessary to ensure the system is structured correctly.
What has been handled incorrectly for years cannot be fixed overnight; furthermore, it could be dangerous, as the sector might suffer a shock. As a result, we could see a sharp spike in prices rather than a decrease, which is tied to systemic risks. Therefore, aggressive intervention on our part is not recommended.
In my view, this process could be completed within six to nine months, after which the system will stabilize,” Shota Berekashvili stated.