ISET

The cost of cooking one standard Imeretian khachapuri in June 2017 ranged between 2.64 GEL and 3.52 GEL, with the average price being 3.08. The average price in June 2017 is 1.8% lower compared to the previous month (May 2016), and 1.5% higher year-on-year (compared to June 2016).

According to the latest news, under new technical regulations on milk and milk products, starting on July 1, 2017, only cheese that is made of fresh milk can be called “cheese.” This regulation is expected to affect the price of cheese, which is the main driver of Khachapuri index.

Will this regulation make cheese prices higher?

According to experts in dairy sector, more than 70% of cheese producers are small, unregistered farmers in Georgia. Registered dairies have been already complaining about unfair competition between them and unregistered farmers, as the latter are exempted from existing regulations. For instance, small producers are not required to comply with the Hazzard Analysis and Critical Control Points (HACCP) standards until 2020. In many cases, small unregistered farmers are also using milk powder in cheese production. As the labeling of their cheese cannot be monitored by the state, this new regulation will be an additional financial burden for registered dairy producers. While the registered companies will experience an increase in the cost of cheese production, they might not be able to increase cheese prices because of competition from unregistered producers. On the other hand, if the registered companies decide to target another segment of Georgian consumers – those who want to be well-informed and are willing to pay higher prices for cheese without milk powder - they might gain from this regulation.

 

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