The FINANCIAL -- Georgian
egg producers have reduced production by 20% due to the rising number
of imported eggs on the market. The decision of the new government to
lift restrictions on the import of eggs has negatively affected local
entrepreneurs by giving the green light to importers. According to
GeoStat, the import of eggs has increased tenfold since 2012. Turkey,
Moldova, Ukraine , Iran and Germany are benefiting the most from the
import of eggs in Georgia.
The number of imported eggs in the first half of 2012 was 1,682 thousand, amounting to USD 597.7 thousand. In the same period of 2013 the number reached 16,916,000, with value of USD 2,061.1 thousand, according to official statistics.
“If the Georgian Parliament does not solve this problem soon then the sector will have some serious problems,” Nugzar Baindurashvili, Founder of egg producing company Giorgi and Company LTD, told The FINANCIAL.
“We met with representatives of the Ministry of Agriculture, LEPL National Food Safety, Business Ombudsman, Chairman of the Agrarian Committee of Parliament, Chairman of the Budget-Finance Committee, First Deputy of the Ministry of Economy, Head of the Department of Strategic Development of the Ministry of Finance, and sent a letter to the Ministry of Justice,” Nugzar Baindurashvili, Founder of egg producing company Giorgi and Company LTD, told The FINANCIAL.
“Egg import was artificially restricted under the previous government, under the pretext of protecting local production. It was in violation of the law however,” an official from the Ministry of Agriculture of Georgia told The FINANCIAL.
“Egg production and poultry were fields of agriculture with successfully set production that were satisfying domestic demand. That is something therefore that needs to be protected,” said Giorgi Bochorishvili, Production Director of Koda, one of the largest poultry companies.
“Georgians consume 500 million eggs annually. Due to increased import we have reduced production by 20-22%,” said Baindurashvili.
Up until the first half of 2012, there were 23 egg producing companies operating in Georgia.
The major large-scale poultry enterprises producing chicken meat and ordinary eggs are: Mukhrani (entrepreneur Elguja Nozadze, 35,000 broiler chickens, producing 20,000 chickens monthly); Patarzeuli Kakheti (300,000 broiler hens per month); Koda Ltd. (village Koda, Marneuli region, 500,000 broiler hens per month); Savaneti-Kazreti (Bolnisi region, 150,000 broiler hens per month); Umisi (100,000 broiler hens per month); Algeti (70,000 broiler hens per month).
“There are 2,500 people employed in egg production in the country, including farmers the figure goes up to 6,000,” Baindurashvili said.
“The import of goods in Georgia is made in line with international conventions and laws. The new government has refused to illegally restrict import. We therefore opened the market to all fair producers within the boundaries of the law,” The FINANCIAL was told at The Ministry of Agriculture.
“If the state will not regulate import, the situation will go on. Eggs produced in Georgia will always cost more than those in Ukraine , Turkey or other countries. The Government should protect entrepreneurs, otherwise we will not manage to compete with importers. Cereals, electricity and other resources are also cheaper in other countries, and we would not manage to compete in those fields either.
The prohibition of import is difficult. The Government should either limit it or impose high fees on importers. None of our neighbouring countries are importing eggs, as their governments are protecting their entrepreneurs,” said Bochorishvili, Koda.
“Thousands of people are employed in this sector. The Government needs to support it, similar to the way production is protected by the government in any country. Due to the enhanced general solvency of consumers in the country, the consumption of eggs has increased in recent years,” he added.
According to Bochorishvili, imported eggs have had a serious impact on their business. As a result it has been decreased by 20%. According to him, many local producers have had to reduce production.
Until 2012 local production occupied 100% of the domestic market. In 2013 this figure has been reduced to 93%.
“Up until November 2012 eggs were not imported in Georgia. Local production managed to satisfy existing demand. Surplus production from neighbouring countries found its way to the Georgian market, however, as its quality was under dispute, 40% of imported eggs were declared unfit and subsequently withdrawn,” said Baindurashvili.
The Georgian Government recently obliged egg producers to mark the date of production and the name of the company on their eggs. Local producers welcomed this decision as, according to them, the majority of imported eggs were unfit for consumption.
“The marking process has already created certain restrictions. It was the only correct policy of our government in this field. One month is the maximum term of validity of eggs. During import however they might be spending up to several weeks in transit,” said Bochorishvili.
“Georgia is a country which has been exporting eggs to Europe. Local producers have the resources to export eggs but none of our neighbouring countries will permit us, as their markets are protected by them. We are under unequal conditions with the importers,” he added.
In Bochorishvili’s words, the main factors determining the success of egg production in the country were that Georgia had a good base left from Soviet production that was later restored, and it has well-qualified staff, which is a very important factor.
“In 5-10 years time Georgia will face a shortage of specialists. That will then become the number one problem. Taking care of education is a significant issue,” Bochorishvili told The FINANCIAL.