The Beer Industry in Georgia: Rising Prices Boost Revenues, but Profit Margins Remain Consistently Low

Georgia’s beer production appears to have entered a static phase: while volume growth has remained minimal in recent years, value-based indicators are rising sharply. A recent study by TBC Capital reveals that nearly half of Georgia’s domestic beer market — 47% — is concentrated among just four major companies, with Lomisi maintaining its leading position in both beer and non-alcoholic beverages.

In 2024, beer production in Georgia increased by only 1%, reaching 127 million liters, compared to 126 million liters in 2023. Despite this near-stagnant volume, the sector’s overall revenue has grown significantly. Over the past five years, the value of beer produced — including VAT and excise taxes — has nearly doubled: from 180 million GEL in 2020 to 334 million GEL in 2024. This price-driven growth is closely tied to retail price hikes, likely influenced by inflation and rising production costs — including the global upward trends in the prices of glass, aluminum, logistics, and raw materials.

However, alongside increased revenues, the data also highlights a major concern: Georgian beer producers’ overall profit margins lag significantly behind their European counterparts. Despite the weighted average gross profit margin of the four largest companies remaining at 38% in 2023, this figure shows a declining trend, placing companies in a vulnerable position in terms of international competitiveness. For comparison, many Western European brewers surpass 50% in gross margins, reflecting more efficient cost management and stronger brand and price positioning.

Even within a relatively concentrated local market — where a few major players dominate — the beer sector faces multiple challenges. On one hand, revenue growth is achieved primarily through price increases, not volume expansion, suggesting a nearly saturated market. On the other hand, the low average margins indicate that producers must strive for greater operational efficiency just to maintain stable profitability.

In summary, Georgia’s beer industry illustrates how a pricing strategy can sustain sectoral momentum in the absence of volume growth. However, this approach also highlights the need for structural reforms, innovation, and export market development in the long term. In an environment shaped by increasing competition, shifting consumer preferences, and stricter regulations, the sector is entering a new strategic phase — one where sustainable growth can no longer rely solely on price increases.