Monday, February 16, 2009
Further food price rises hit Greek consumers hard
While the rest of the economy may be in freefall many of the large national and multi-national companies that dominate the Greek food and drinks industry have raised the price of a range of basic goods far in excess of the official rate of inflation.
This is the third time in twelve months that such increases have been announced further squeezing family budgets already under strain due to the ongoing economic crisis.
Consumer organisations have been quick to call for a boycott of companies considered to be profitering, however the reality remains that the retail cost of food and other everyday essentials remains stubbornly high. Many Greeks of all political persuasions argue that the reason the average consumer pays over the odds is the presence of cartels that choke competition throughout the country.
This week the Greek competition commission imposed a fine of 29.9 million euros on the Swiss food conglomerate Nestle for using its dominant position in the Greek market to shoulder out competitors in supermarkets and other distribution points.
Similarly, energy giants Shell and BP Hellas were fined 50 million Euros for price fixing in November 2008.
Despite such penalties, the right of appeal combined with Greece’s slow moving legal system mean that there is doubt over how much will finally be paid out and when it will be paid.
In addition Greece’s competition commission is itself still embroiled in ongoing scandal following the revelation that some members of the commission allegedly asked for a 2.5 million Euros bribe from Greek diary companies in 2007 in order to reduce 25 million in fines fines imposed upon them for price fixing.
Even before the latest price hikes Greek consumers were paying 66% more than German and Dutch shoppers for basic supermarket items. As a result last year Greek food sales saw their first decline since 1974, a further indication that even before the global financial crisis many of the country’s poorest were cutting down on basics.
As the global slowdown starts to affect Greece’s most important economic sectors; tourism, shipping and construction doubts have been voiced about how much more lower income Greeks can cut from their family budgets