POLICY PAPER - PRICE CONTROLS AND THEIR IMPACT ON ECONOMY

In the attempt to lower the food prices earlier this year, in February, the Ministry of Economy and Sustainable Development (MoESD) of Georgia was given the task of creating a new draft law aimed at regulating food prices (Business Media Georgia, 2023). [...] •Return of unsold products; •Payment of the supplier for stocking, display and listing; Six grey unfair •Payment of the supplier for promotion; trading practices •Payment of the supplier for marketing; •Payment of the supplier for advertising; •Payment of the supplier for staff of the buyer, fitting out premises. [...] While they might not be officially prohibited from charging the prices they want, the government “indirectly hinting” the ISET POLICY BRIEF SERIES PAGE | 3 PRICE CONTROLS AND THEIR IMPACT ON ECONOMY need to reduce the price still implies the government using price controls to regulate the market. [...] | OTHER COUNRTRIES’ EXPERIENCE WITH PRICE CONTROLS Some of the most common examples of price controls include rent control, where governments set a maximum amount of rent that a property owner can charge and limit the yearly rent increase, as well as the regulation of drug prices to increase the affordability of medication and healthcare. [...] That is why it essential to remain on the right track and design government policies in line with the principles of the market economy and in consultation with the private sector, civil society organizations, and development partners.