“Greece is not bananas, greedy price gouging is intolerable and the multinationals need to understand this,” the Prime Minister said recently, actually admitting, for the first time, that the price explosion was caused by corporate over-profits. .
This admission by a fanatical advocate of the free market consigns the myth of imported inflation to the dustbin of history, and grimly confirms that precious time was lost by the government to fight the precise “monster.”
The numbers are relentless and the extent of the damage to Greek families is immense. From 2020 – the first year of the epidemic – to today, prices have “flew” and government interventions – one after another – have fallen on deaf ears.
A four-year upward price trajectory
At Maximos they've been writing and destroying since March in a last ditch effort to put a “brake” on prices that include roofers and cutters.
Solutions are sought behind closed doors, but not found
Until then, olive oil is selling 64.07% more than in 2020, seed oils are up 47.9%, sugar is up 169.98%, baby milk is up and toast bread is up.
Sargana (formerly IRI) data on price trends from 2020 to November 2023 show very compellingly that price inflation on supermarket shelves is not solely a result of Russia's invasion of Ukraine. They followed an upward path before the outbreak of war and continue to this day with the international factor affecting prices, but not the only anomaly as the government would have us conveniently believe.
Today, the government's current “battle” appears to have been completely lost. Oil, fruits and vegetables, items that should not be missed from any table, have become a luxury item and emerged as champions of precision.
Shops in street markets have been sold out for the past few weeks, with consumers counting their money and counting again, but they're not coming out.
Stock market oil
The shock to consumers from the rise in olive oil prices seems to be continuing. “In the fall of 2022, oil for consumers was between €5.45 and €5.75 per liter. Now, in January 2024 it will be between €16 and €17/lt. Oil increased by 212% within 14 months,” said (MEGA) the vice president of the Agricultural Cooperative Union of Heraklion. Myron Tsiletsakis said it would cost 4.12 euros in 2020 with the necessary footnote!
Olive oil has increased by 212% in 14 months
The rally did not stop here. Through the “big channel”, olive producers announce even bigger increases in the coming months, which will “shake up” the family budget.
“Last year, the average price of oil was sold to the producer for 5 euros. The consumer received it for an average of 13 euros. Now that it is sold to the producer for 9.50 to 10, how much will the consumer get? It will definitely reach 20 euros per liter,” underlined Myron Siletsakis.
Vegetables are also expensive
Public markets, once a refuge for impoverished families, today turn out to be goldmines as prices of seasonal vegetables skyrocket.
According to the Organization of Central Markets and the Federation of Market Sellers: today carrots cost almost one euro per kilogram, last year they were just 70 cents, and in 2022 55 cents. Today we buy cauliflower for one and a half euros per kilo. It cost only 80 paise last year and 60 paise in 2022. We buy spinach for half a euro today, whereas last year and the year before that it cost 40 pesos. A kilo of onion costs one and a half euros, up from 90 cents last year and 40 cents the year before. Potatoes rose from 55 cents in two years to 1 euro and 20 cents this year.
When government intervention is subsumed, it adds another layer to already large problems. The latest crisis in the Red Sea is coming to ignite the fragile global economy, hitting Greece as well. Analysts worry the Red Sea crisis could trigger a new surge in inflation and many shipping companies are discounting a new wave of price hikes on various products after deciding to circumnavigate Africa instead of using the Suez Canal.
Everything here is paid for
The government's inability to intervene decisively is fully cashed in the treasury. Inflation rose 3.5% year-on-year in December, while food grew 8.9%.
The latest ELSTAT table presents key price changes of 45 goods and services between December 2023 and 2022. This fully exposes the government as food costs have risen dramatically and overall by 25% (15.5%) in the last two years. 8.9% in 2022 and 2023).
14 sources of precision
As if that wasn't enough, Sargana's base view expects a 4.5% appreciation this year. In particular, food inflation is estimated to be +4.6%, personal hygiene and care products +4%, and household goods +5.7%.
Meanwhile, Research of OT It records 14 precise evidences based on analyzes by statisticians, economists and scientific bodies. Eight of them permanently fuel inflation and are chronic pathologies of the Greek economy and market, while businesses' greed for profits, consumption over domestic production and imports, the pandemic, the energy and climate crisis, and low wages. Cocktail precision.
Nightmare on the street of the public market
Panicked by the uncontrollable dimensions of the situation, the finance staff took Maximos's instructions and announced new measures, which mainly concerned the imposition of a ceiling on the gross profit margin on baby milk, but would leave behind “insane” price increases. Basic food items, first and best olive oil prices increased by 58.5%.
We're sizing up the X4 with the expectation that the price will drop
Of the package of new measures announced by the Prime Minister and outlined by Development Minister Kostas Skrekas, a profit margin ceiling on baby milk and a 30% reduction in supplier rebates and credits for supermarkets stand out in anticipation. A corresponding reduction in shelf price.
In detail, the new phase of operations provides:
1. Reducing benefits for supermarkets. Suppliers' total discounts are reduced by 30%, with a corresponding reduction in the prices of these products on the shelves. According to the Competition Authority, the measure will be applied to categories where deviations are found. These products include: detergents, household cleaners, toothpastes, shower gels/shampoos and baby diapers. [Εφαρμογή: Μάρτιος]
2. Prevention of unjustified markups. Sellers who inflate the prices of goods are not allowed to run promotions on the goods with inflated prices for three months. This measure applies to all products sold in supermarkets. [Τέθηκε σε ισχύ]
3. “Pure” prices from field to shelf. Suppliers are obliged to sell products at retail at “net” price (net pricing). Credit invoices up to 3% of product or shipping proceeds are allowed. This activity includes fresh fruits, vegetables and meat. [Εφαρμογή: Μάρτιος]
4. Limit on gross profit margin for infant formula. The sale price of baby milk is capped at the gross profit margin of companies that import, produce and distribute baby milk in Greece. The ceiling is defined as the sum of the company's operating expenses for the specific product category and 7% of the business profit. [Εφαρμογή: Μάρτιος]
disappointed…
With food prices skyrocketing and wages stuck in Greece, the price of basic commodities is dismal compared to other European countries.
For example, according to the online site Numbeo, a liter of milk in Amsterdam costs 1.18 euros in the Netherlands and 1.63 euros in Athens. Athenians pay more for a dozen eggs than Madridians, while a kilo of cheese costs 3% more than the Romanians ask.
Fresh produce like apples, oranges, tomatoes, potatoes, onions, cucumbers are cheaper in Athens than in other European capitals.
Rising prices, stagnant wages
While there is no end to the praise spiral, wages in Greece remain stuck with unflattering comparisons. According to the OECD, the average annual salary in Greece is 23,700 euros, in Italy it is 40,950 euros, in Spain it is 39,095 euros, in Belgium it is 59,154 and in France it is 48,131 euros.
“The Persistent Poverty of the Greek People”
Panagiota Kalapotharakou (MEGA), head of EKPOIZO, spoke about the problem of accuracy and profitability, with the market segmented and consumers “numb” in this system.
“The reduction must be severe”
“The biggest problem facing Greek society at the moment is precision. This is the third step taken to intercept the precision of the ministry. We have reservations about the new package if it is not implemented specifically. The important thing is to implement them and see a reduction in prices. However, the reduction should be drastic,” he initially said. said.
“It is not fair to have such prices compared to other European countries. This can only be solved by restrictions. Restrictions compared to European countries. Consumers' purchasing power is lower than European consumers. What we see is the continued poverty of the Greek people,” he added.