Beef price puzzle
11 November, 2010
Beef price puzzle

Georgian government believes the recent price-hike on fresh meat will be changed by unprecedented price slump in November-December thanks to stronger market administration scheme. The scheme introduces licensed slaughterhouses as an obligatory chain between butchers and cattle breeders. Butchers claim the slaughterhouse involvement complicates the life in fact and jacks prices up.
The fresh beef must get on the market counters and shelves of supermarkets of Tbilisi only via slaughterhouse staring October 18, 2010 in compliance with the governmental regulation.

Government tries to set the beef quality in line with the international standards in this way and insure foods security. Four licensed slaughterhouses equipped with the art-of-the-state technologies will insure cattle slaughter and beef processing in due sanitary conditions prior the product gets the counters and is sold to consumers. However as much as the slaughterhouse infrastructure is underdeveloped at the moment in Georgia the obligation exempts regions as of yet and refers only beef distributed to the capital of Georgia, Giorgi Chaduneli, PR Manger of the Ministry of Agriculture (MOA), informed Georgian Journal.  Due to the very reason the restriction covers only beef and exempts mutton and pork at the moment. But slaughterhouse is planned to become obligatory to all sorts of meat gradually and cover the entire country.
Farmers and cattle-breeders can slaughter and trade by any sort of meat between themselves without new legislative restrictions. Governmental understanding is that the meat distribution chain from the cattle-owner in villages to supermarkets in cities and specifically to Tbilisi included speculative chains that jacked meat prices up. Besides, the meat was slaughtered and traded in unsanitary conditions that posed food safety risks. 
According to Bakur Kvezereli, Minister of Agriculture of Georgia, meat price accounted for GEL 2.50-3.50 per kilo however it was distributed to consumer via several mediating chains [including the farmer who breeds cattle, than distributor to regional market, distributor from the regional market to Tbilisi wholesale market, and distributor to supermarkets finally] that increased price artificially. Now when only slaughterhouse will be mediating between farmers and supermarkets the price is supposed to reduce by 20-25% actually. As an aftermath the average price on beef accounts for GEL 7.50-8 at slaughterhouses, Kvezereli accentuated. 
However butchers who run counters at supermarkets claim the new scheme rather complicates than eases situation and prices are jacked up actually. The thing is that beef price stood at GEL 6-7 per kilo at Bazaar before the stronger administration scheme was enforced and the best quality beef was sold for GEL 8 per kilo in summer and September of this year as far as the wholesale market price accounted for GEL 5-7 per kilo, now slaughterhouses fix GEL 8.60 per kilo actually. And the first effect of the novelty was that the price on beef jumped to GEL 13-14 per kilo starting November 18, 2010 when the new meat market administration mechanism entered into effect.
Kvezereli believes this was a speculative deal practiced by about 70 entrepreneurs who decided to derive as much profit out as possible and promised to research each chain in the meat distribution system so as to protect consumers’ rights.
“We made administration of meat market stronger and some dishonest entrepreneurs took an advantage out of the situation and increased prices artificially, but we will do our best to remove this kind of chain so as to make beef prices get back to the previous figure,” Kvezereli pledged on November 4. 2010. 
Kvezereli belives that the situation will be stabilized soon after Natakhtari  slaughterhouse will develop its own shops-network under Iberula brand in Tbilisi where the beef price will be equal to the starting price fixed at slaughterhouses. Iberula opened its first shop on November 6, 2010 and plans to open 6 shops within two months and enhance the number to 25 within 6 months, Davit Barabadze, Chairperson of Natakhatari slaughterhouse and Iberula network, told Georgian Journal. Prices at the newly opened Iberula shop varies between GEL 4-9.50 depending on categories. Barabadze swears that farmers are happy over the governmental initiative and there is a big run of cattle-breeders at the slaughterhouse for they  pay to farmers GEL2.50-3.50 per kilo immediately.
However a butcher [who prefers to be incognito] who runs a small counter in the outskirts of Tbilisi, assures that farmers face transportation problem in fact because earlier distributors were transporting the slaughtered cattle to trade outlets, while now a farmer needs to transport his cattle to slaughterhouse that costs GEL 200 from Tianeti, a mountainous region, for example to Natakhtari that is scarcely available. Besides slaughterhouses fix GEL 1.20 per kilo as a service price and all these is built in price ultimately.
“I used to go to Karajala [a slaughterhouse near Tbilisi] myself and bought beef from cattle-breeders at first hand actually for GEL 6-7 per kilo, now I pay GEL 8.60 to slaughterhouse and fix GEL 10 per kilo when I sell it. I do not think that the price will reduce more than that,” He told Georgian Journal.
Barabadze assures that they gather cattle among pheasants themselves and they face no transportation problem in fact.
“Quite the reverse, they are happy that they need not go to market anymore and we solve the beef slaughter and distribution problem,” He said.

Print
Other Stories
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
Silknet raises $200 million in Eurobond issue
27 March 2019 - JSC Silknet (“Silknet”), one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”).
Pistachio trees will be planted in Georgia
Dozens of hectares of Pistachio are planned to be planted in Georgia this year.
Toyota Safety Sense and Hybrid Technology
Toyota Caucasus, has presented two new models the 5th generation RAV4 and the 12th generation Corolla at Rustavi International Motorpark, several days ago.
Bidzina Ivanishvili “became number one oppressor of businesses in Georgia” - ICC Georgia chairman Fady Asly
Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day
The best brands of Belarus will be exhibited on a large-scale exposition in Tbilisi
"The Belarusians like to come to Georgia to relax near the sea in Batumi as well as to stay in sunny Kakhetia."
Don’t treat business like a hooker! - Georgian businessman Vasil Soprpmadze addresses politicians
Businessman Vasil Sopromadze, founder of the company "Fresco", addresses politicians
RAV4 No Compromise and Corolla Set to Impress – Two New Cars Presented by Toyota
Toyota Caucasus, the company constantly aspiring to greatness, has presented two new models the 5th generation RAV4 and the 12th generation Corolla.
Mamuka Khazaradze quits TBC bank, does not sell the TBC Bank share
I made a decision to leave TBC bank where I spent 27 years of my life
10 Reasons to buy an apartment in the suburbs
There is a tendency for Tbilisi dwellers to move from central parts of the capital to the suburbs.
Georgian citizens are granted the right to work in France
The French Embassy in Georgia made remarks on granting Georgian citizens the right to work in France
The New York Times: Bitcoin declines but Georgia still bet on it
The New York Times has recently published an article about reasons, challenges and causes of generating Bitcoin in the former Soviet country Georgia.
EU to allocate € 13 billion for Eastern Partnership countries, including Georgia
The European Union together with the World Bank plans to allocate investment worth € 13 billion for infrastructure projects in the Eastern Partnership countries.
Anaklia Port and its importance for Georgia
In 2016, Anaklia Development Consortium was authorized to launch the construction of Anaklia Port.
Cryptocurrency mining threatens electrical network in Abkhazia
In the breakaway region of Akbhazia rampant cryptocurrency mining is threatening the shaky electrical network, reports an article of the news portal EuroNet.
Caucasus Wine University to be opened in Gurjaani
In the Kakheti region a new viticulture campus of the Caucasus University is in the process of planning.
Photos describing life of the poorest in Georgia
Fight with poverty should be among top priorities of every government in every country.
Training farmers to rescue the organic hazelnut production in Georgia
Even drizzling rain and unpleasant gusts of wind can’t prevent the farmers from coming and participating in the agricultural training.
Bleak times for organic farmers in Georgia – but there is hope
Organic hazelnut production is a delicate plant in Georgia that has emerged just a couple of years ago. Various pests, among them the Asian stink bug Parosana, trouble hazelnut farmers and menace their livelihood – even before their businesses could really take off.
Hybrid car imports are going through the roof in Georgia
Thanks to their fuel economy, the popularity of hybrid cars is increasing in Georgia, where fuel affordability is low and prices for fuel are unstable.
The New Year offer from MAQRO Construction - Apartments with unbelievable discounts and the parking spaces for FREE!
Location, green yard, spaces for various needs, experience of the construction company and parking space are the main important criteria for potential buyers of apartments.
Interview with the co-founder of Kiwi Vegan Café – the first vegan place in Tbilisi
Behind the Kiwi Vegan Café stands a group of activists who wants to raise Georgian’s awareness for animal rights and welfare.
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
19.04.2019
20.04.2019
USD
1
USD
2.6939
2.6939
EUR
1
EUR
3.0323
3.0323
GBP
1
GBP
3.5053
3.5053
RUB
100
RUB
4.2087
4.2087
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.6939
EUR
1
EUR
3.0323
GBP
1
GBP
3.5053
RUB
100
RUB
4.2087
April 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30