Georgia's sheep rearing industry decimated by favouritism, OCCRP investigation reveals

By bne IntelliNews August 17, 2017

Favouritism has decimated the number of Georgian companies that rear and sell sheep, an investigation by Studio Monitor, an associate of the Organised Crime and Corruption Reporting Project (OCCRP), revealed on August 16.

Georgia's sheep industry took off a decade ago, when a Georgian farmer brought Turkish and Lebanese investors to Georgia. They became interested in grass-fed sheep that are customarily sacrificed in Muslim communities for the Eid al-Adha holiday.

By 2008, the price paid for one head of sheep went from almost nothing to $60, one of the farmers interviewed for the investigation reported; the price continued to increase, moving up by 50% in 2009. Meanwhile, the number of companies active in this niche increased from two in 2008 to 21 in 2009, while exports shot up from 25,271 sheep worth $1.1mn in 2008 to 266,540 sheep worth $17.1mn in 2009. 

But state controls introduced in 2011 decimated the industry to the point where only five exporters remained in 2013, the investigation argued. Out of the four companies that are still active in sheep rearing at the moment, two of them reportedly have connections with a former minister of agriculture, Otar Donelia, who is currently the head of parliament's agriculture committee.

Thus, Victoria LLC and Alkernazi LLC, the two companies, were registered at the same address in Tbilisi nine days apart in 2013. Victoria was founded by Gia Adamia, whose nephew is a close friend and former classmate of Donelia's, the investigation claimed.

The farmers who have quit the industry allege that this link has resulted in government favouritism for the companies and roadblocks for everyone else, driving them out of business.

Meanwhile, one of the first foreign investors in the business, a Turkish businessman going by the name of Yildiz, said that he lost his suppliers and customers after the government introduced stricter controls and that, in 2014, he was subjected to intimidation by the finance ministry, who called him in but did not give him a reason why he was being investigated.

A letter leaked to Studio Monitor dated March 2015 appears to indicate that the Georgian agriculture ministry bent the law in order to allow Victoria LLC to keep sheep for a shorter period of time in quarantine than the legally-mandated six-month period after importing them from Armenia and before selling them to customers in Iran, Turkey and Arab countries. In the letter, Victoria LLC asked the ministry to shorten the quarantine period to one month in order for it to meet the growing demand from its customers. The National Food Agency granted the company its request, saying that it was "in the best interests of the country", though the law was never changed.

The country's new agriculture minister, Levan Davitashvili, vowed in June to tighten import and quarantine rules so that no sheep from other countries could be sold as Georgian-born, the report concluded. 

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