Don’t blame EU!
30 June, 2011
Don’t blame EU!

As a matter of fact, to meet the food safety standards set by the EU to Georgia within the framework of talks on Deep and Comprehensive Free Trade Agreement (DCFTA) the EU began by surveying the stronger control over slaughterhouse infrastructure. The point is, the key paragraphs of food security-related legislation that was suspended starting 2005 in Georgia and supposed to become active in 2010, was postponed till 2011 under the excuse that it might harm the entrepreneurs as most

of small entrepreneurs could not afford adoption of appropriate standards at enterprises. Moreover, the law came into force in 2011 under test regime, exempting food enterprise from penalties till 2012 so as they could adopt all relavant standards and equipment required by the law.

However, the control over the slaughterhouse infrastructure became crucial for Georgian government starting past fall and to observe strong international food standards the government made obligatory to deliver meat to Tbilisi market only via slaughterhouse.

However, as much as the slaughterhouse infrastructure is underdeveloped at the moment in Georgia, the obligation covered only the Capital of Georgia and only the beef. Mutton and pork remained uncontrolled.  However as far as tout of four licensed slaughterhouses three are far from Tbilisi, Natakhtari slaughterhouse under the Iberula brand situated near Tbilisi became almost a market monopolist. As a result meat prices doubled in past October and minister of agriculture promised that prices would not increase anymore and would decrease by 20% after Iberula develops its own trade outlet network in Tbilisi.  Iberula addressed to the network development and prices somewhat regulated for a while however starting June when usually meat prices go down due to seasonal effect prices doubled again. And a Georgian majority MP ascribed reasons to the EU food safety requirements set as obligatory to start talks on the DCFTA. The MP did not mention anything on the EU requirements demanding adoption of the effective anti-trust body to no avail for 5 years already. The statement upset the EU. Echanove Juan-Jose, a member of the EU commission Delegation in Georgia, spread an official disclaimer on June 23, 2011 and asked not to blame the EU in meat price hike and put out a set of problems jacking the meat price up: inflation, decline in meat production caused by the lack of governmental support to small farmers, underdeveloped slaughterhouse infrastructure that do not match the demand and the monopolist nature of slaughterhouse market.

“The EU has never asked the government to right now start enforcing the issuethat all meat reaching the market should be slaughtered in slaughterhouses, and, definitely, not as a pre-condition to start DCFTA agreement negotiations,” Echanove Juan-Jose stated.

What the EU is asking for is the gradual implementation, as planned, of the food safety strategy of Georgia, in order to have a proper food safety system in place. It is up to Georgia to define the steps and the sequence of the measures – the statement stresses adding that there are other various measures related to animal health and food security where the EU would like to see substantial improvements but Georgian government is not as active as it should, including animal identification, state-own managed vaccination surveillance and campaigns, accreditation of private veterinarians, etc.

“We wonder why the Government is not yet sufficiently tackling all these topics whereas, in the case of slaughterhouses, it is acting so promptly. Slaughtering in slaughter houses does not guarantee, per se, the food safety of the meet. It is just a step in a whole process. Without implementing the whole range of steps, the underlying problems will not be solved.

“We call on the government for a systemic approach on this topic, not for the adoption of ‘ad hoc’ measures… Ideally, there should be slaughterhouses available in most districts of Georgia. The current number is yet insufficient,” the EU statement says.

Shota Murghulia, an economic analyst, presumes that Georgian government resists adoption of the EU recommendation on restoring effective anti-trust body trying to discredit the EU recommendation so as to show to society that not all recommendations including the anti-trust service may be good. According to him, meat price-hike was reasoned by half-observance of the EU recommendations that missed the anti-trust service along with other factors indicated by the EU. The anti-trust service discharges market of monopolist activity that may occur as a result of stronger food security rules.

“EU recommendations must be adopted in full set to be effective. The stronger meat quality control caused creation  of the market monopolist that is uncontrolled in Georgia and jacked prices up,” he told Georgian Journal. “I doubt that government reluctant to restore the effective anti-trust service tried to show that not all EU recommendations are good; they are still negotiating with the EU to change its anti-trust recommendation but the EU will never change it and it was a mistake to ascribe the meat price hike to EU.”

The statement of the civil society of Georgia incorporating non-governmental watchdogs also accentuate  the questioned prices  increased not from following the EU trade standards, but from not ensuring free and fair competition on the Georgian market.

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