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Fresco investigated for exploitation of labour in Tbilisi

9 February 2017

Georgian supermarket chain Fresco was investigated by the the Ministry of Labour, Health and Social Affairs of Georgia for alleged exploitation and forced labour, but ‘the allegations were not confirmed by any of Fresco’s employees’, the Minister of Labour said on 9 February.

A Facebook post on 7 February claimed that employees of Fresco are being exploited by the company’s administration and management. The authors of the post complained about long unpaid working hours (60 hours a week instead of the legal maximum of 48), groundless cuts in salaries, forced labour, and bullying.  

Fresco responded to the post the following day, calling the employees ‘losers’ and ‘spongers’, and denied any violation of the law. ‘Fresco is always ready for any inspection… Fresco — without losers’, the statement read.

Fresco currently operates eight supermarkets in Tbilisi, and has been on the Georgian retail market since 2012. The chain is registered under an offshore company, V.P.S. GROUP LIMITED, in the British Virgin islands. Controversy surrounded Fresco last summer when it emerged that management would play Georgia’s national anthem every evening, during which employees were forced to stand still with their right hands over their hearts. Fresco is owned by Vasil Sopromadze, whose name appeared in 2016 in the notorious Panama Papers, a massive leak detailing secret offshore accounts of a number of prominent people worldwide. However, while commenting on the topic, Sopromadze stressed that owning an offshore company is not illegal in Georgia, and that he had never tried to evade tax or avoid sanctions. He referred to the practice of playing the anthem routinely as ‘a mistake’.

A supervisory group from the ministry’s Labour Inspection Department investigated one Fresco supermarket and looked through labour agreements, according to the department.  Representatives from the ministry met Fresco employees as well as managers, the head of the department said. The department spent only a few hours in one of Fresco’s supermarkets, after which, according to the minister, no-one confirmed the allegations to the authorities.

Nevertheless, the mandate of the labour inspection does not cover many possible abuses of employees which remain legal, the department can only research the safety of the working environment and forced labour. If labour exploitation or forced labour are discovered, the Ministry of Internal Affairs will take over the case.