The assortment of Georgian product for exporting to European market

Nino Orjonikidze
Head of Quality Provision Service of Social Sciences, Business
Law Faculty at LEPL Gori Teaching State University, Professor
orjonikidzen@gmail.com
577 25 12 24

The European Union is one of the biggest trading partner of Georgia. The main question, what about Georgian businessmen care, is what and how to enter to the European market. Imported product in EU should meet the requirements established by food and product safety. One of the non alternative product for the European market is Georgian honey, because it is the only product, which falsification will be revealed quite easily by the European laboratories. How is it possible to export Georgian industrial product to the European market? The entrepreneurs for getting of certificate of products should use the services of laboratory accredited in any EU member country and with it to export the product in EU.
The European Union is one of the biggest trading partner of Georgia. It’s share in total number of import amounts 30%, and exports 20 %. The share of European market of exporting agricultural product is approximately 23 %. If we do not consider few products ( nut and etc) Georgia cannot to export variety of product, but association with EU would be useful for Georgian economy.

The main question, what about Georgian businessmen care, is what and how to enter to the European market. Imported product in EU should meet the requirements established by food and product safety. Nowadays there are not made competitive products with these requirements and values in Georgia. In the appropriate fields (Sanitary and phytosanitary measures, technical barriers in trade) as a result of Georgian legislation approximation with EU legislation, will be created the European Food Safety and Quality System. This will improve food control mechanism in the local market. According to the agreement, on 28 tariff line (This is 0.3% of the complete tariff list) will affect the ,,ENTRY PRICE” in EU , or a fixed price of import . This means that, if the sale price (invoicing price) of the product created in Georgia will be lower than the fixed price established by EU, the importer will have to repay these difference between the prices, and if the sale price is equal or greater of the EU price , the production will be fully exempted from customs duty.

Georgia had benefits in the European market, but due of formal barriers they were not used. Therefore, approximately only 30 goods from 7200 were exported . The greatest part of the experts think that our production under the current form will not enter to the European market, not because that we are not allowed, but because it will not take possession itself. A little of money is not enough to produce a high quality product. Georgian Businessmen cannot compete by the price; therefore it is necessary to carry out fundamental reforms. Otherwise we will not be preference conditions. Experts think that there was not created such a serous product , which can be enter and take possession at the EU market. The reason is the deficit in depth knowledge of business. There is a unusual formula: quality + price. All manufacturer should follow this formula . Only regulations are not enough.

For example, mineral water and wine in the European market is very cheap and such low prices often cause astonishment. For example , Turkey sells water in the European market, if it enters with this price in Georgia, produsing of water will be interupted.

One of the non alternative product for the European market is Georgian honey, because it is the only product, which falsification will be revealed quite easily by the European laboratories. The problem of ecological, pure honey Realization today is actual in European and American market.In these countries are spread „bee paralysis“ disease and farmers struggle with it by antibiotics, that is why the probability of honey falsificastion is increased. The occasion of spreading „bee paralysis“ is very low, therefore Georgian farmers should limit using of antibiotics. The waste of antibiotics remain in honey, which can be show by laboratory analysis. The United States of America and Europe have appropriate norms and strict limit of antibiotics.If Georgian honey do not meet standarts, the product will not be able to enter to EU and USA markets. According to the Euro standarts, the document, which proves that honey is made in econogicaly pure conditions, should issue every day. There should be descirebed following details: if there is or not rotten animal, any other body or open toilet and etc.

The problems cause serious obstacles to local entrepreneurs. According to the official data of Ministry of Agriculture of Adjara,today there are about 200 major and 500 amateur beekeepers in Adjara, who annually produce 400 tons of honey. Beekeepers say that despite the competitiveness of Georgian honey, its export to the international markets is impossible. The beekeepers have no modern technologies, by means of which they will be able the producing and packaging of honey.

44 sample of honey was sent from Georgia to laboratory Riga in 2015. Out of this in 18 samples were found antibiotics. 22 samples were satisfied EU and USA market standards ,except the European market georgian honey is available for exporting to Asian and African markets. In 2013 Georgian honey was exported in six countries : 2,6 tons in Azerbaijan,0,5 tons in United Arab Emirates, 1,3 tons in Iraq , 0,3 tons in Lebanon, 12,9 tons in Libya and 7,1 tons in Saudi Arabia.

Switzerland is the main supplier of honey on EU market. According the data of 2013, this country produced 1004 thousands tons honay .The price of flower honey ranges from 5,55 to 12 euro on European market. Acacia honey costs from 7,5 to 8 euro.

How it is possible to export Georgian industrial product to the European market? The company „ Sakcable“ has already been trying to enter on EU market for one year, but this process is delying due of technical bariers. For product certification is necessary to hire foreign experts, which is connected to time and high costs. EU defence its consumers safety and allow only certified products on market. One of the barriers during an export is linked to certificate process. After setting of international and European standards at the company, there should control of product meets to standards. Control process is done by accredited laboratory. The license of accreditation of laboratory is issue by National accreditation center in Georgia, which is not internationally recognized. Therefore the estimation of product standards accordance by the laboratories accredited by the center could not be recognized by Europe. There are 21 European directives , which are linked to industrial products. The dicective, which includes cables is not recongized as a technical regulation, but the company can produce products under the determined standards of this regulation. In order to export to European market, the company can follow the scheme: For getting of certificate of products should use the services of laboratory accredited in any EU member country and with it to export the product in EU.

Conversely of this, there is concrete example, when industrial product, produced in Georgia was exported in EU before the existence of free trade agreement. The innovative invention linked to production of bamboo is connected to the name of Sergo Jakeli, the doctor of physic-mathematics science. He studied the technology in China and established his own enterprise. Initially he started producing of parquet and working on composite. Later he invented bamboo furniture and folding house, which kept the temperature during all seasons of an year. His products sell on the European market for a long time and he considers that the main advantage of the country should be innovations, technologies and brad products.

Close relationship with EU is very important for the security for our country, because we will have strong and reliable neighbor. For integration process management with EU, it is necessary to plan, monitoring and fulfill it by the society. As a result of successfully fulfillment of this plan, Georgia will have real possibilities to become a member of EU. It means that the knowledge about European life and current events will become as important for Georgians, as national history and events in our country. For this it’s necessary:
To inform the population about current Euro integration process in Georgia, for better foresee their future. The society should have an opportunity to involve in Euro integration process.
We should not forget that EU market is open only for those products, which meets the regulations of internal market of EU. Nowadays there are not almost made the competitive product with those requirements and values in Georgia.

Despite of several years using of preferential system, these relationships have not changed qualitatively from year to year.
Georgian companies should establish branches in EU countries and supply the service to European costumers.

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