Have you ever wondered why we, in Greece, pay htree-times up prices for the same goods and packages sold else where within the European Union boundaries? And thus, despite the austerity measures, the regular and emergency taxes and the permanent decrease of our incomes? Of course, you have wondered and we’ve discussed this severla times here. But now, there are two “official” statements explaining why the prices do not go down. Despite the wages decreases apparently to boost competitiveness.
One statement comes from the Hellenic Federation of Enterprises (SEV) – the biggest employers’ organisation -and the other comes from the National Confederation of Greek Commerce (ESEE):
Greece’s biggest employers group on Thursday said that rising costs, poor infrastructure, higher borrowing costs and red tape were among the main reasons that the cost of goods in the country has not dropped despite the ongoing crisis.
In a memo sent to the Development Ministry on Thursday, the Hellenic Federation of Enterprises (SEV) set out six reasons for the stubborn prices. These were:
Soaring energy costs as a result of higher energy rates, including a special tax tagged on electricity and gas bills. The escalating cost of mostly-imported raw materials. Poor infrastructure services. High transport costs which undermine competition. Eextra financial strain caused by the doubling of borrowing costs over the past year, the deterioration of payment terms for imported materials (e.g. packaging materials), the significant increase in taxes, and the long delay in VAT reimbursement. Red tape and a complex administrative structure. (Full article in ekathmerini)
The statement from ESEE states 13 reasons and here they are:
High Value Added Tax (V.A.T.). Transfer pricing among multinationals. Banning imports from cheaper multinationals branches. Distortion in transport and logistics. Bureaucratic and city planning burdens. Oligopoly with secret agreements between wholesale and retail markets. High rates of profits. Big dependency from the international prices for fuel oil and inability to combat illegal fuel trade. Short-term summer and winter sales. Cuts in labour cost and rentals were replaced by increases in utilities and hikes in loans interest rates. Several problems with the issuing of receipts. State bodies’ concentration to lift obstacles for new enterprises, while it would be more effective to search the enterprises that form the profits. Lack of flexibility from the side of several ministries with the effect that many commerce sectors dropped their prices while food and other basic needs items keep the prices of monopolies. (ERT)
Wait to see where the prices will go when the finance ministry will apply a flat tax of 30% (some claim 35%) to all self-employed and freelancers and thus from the very first revenue euro thus abolishing the tax-free amount.
PS Whew! Now that I know the reasons, I could go light-hearted to the supermarket and buy this wonderful detergent sold €29 for 70 measures. Unless, its price went down to €28.70 but for 60 measures. as the latest practice of all multinationals here without exception… However, on second thought, I’d choose to stay home and eat a chocolate out of frustration.
The high transportation cost in Greece is due to lack of competition and extremely high profits of transporters in Greece. Recently I spoke with a Dutch export manager and he told me transport has never been so cheap as nowadays: a truck from Holland to Russia costs only 1000 euro. So even if in Greece transport to islands has to be added, it could be still a lot cheaper than it is now. And why does transporting your car from Germany to Greece costs 1000 euro and they other way around only 400 euro?
Capital is trying to avoid deflation and thus it keeps prices high when it would be better if they fell in line or faster than falling incomes. The poorest in society, especially the dispossessed, would benefit greatly from deflation. Those who, probably falsely, believe they still have some wealth to protect would probably not benefit.
Structural shortcomings and actions of the Greek state make up the bulk of the problems. Actions of multinationals are just a tiny part of the problems. And even those you have to write on the books of this failed state apparatus. Because it is failing in it’s duty to prevent cartels. Multinationals are doing things here they can not get away with in other countries. But their actions are totally in line with the actions of big Greek companies.
Ergo: Structural changes are needed badly and the lack of it are costing us all dearly.
(Greetings from sunny and hot Kythira. 😀 )
higher borrowing costs and red tape ???is THIS IS FOR EEC COMPANIS LIKE ikea, lidl, etc, i don not think so, take for example cheese IT IS THE MOST OVER PRICED IN THE EEC FETA IN LONDON IS THE SAME IF NOT SHEAPER !!!high transportation cost (JACKIE SAID ABOVE ) YES RIGHT BUT WHO IS RESPONSIBLE ?? IS SOME MP, BEHIND THE IMPORTS AND FOOD DEALS HAD IT
Just to let you in on something you already know probably.
In 2008 i was working for one of the Big Supermarket Chains in Greece in Thessaloniki. And it was normal to add between 200% upto 1000% profit on the shelf products at the store.
This means we receive a product which costs delivered to the store at 1,00€uro and we price it on the shelf for 3,00€uro to 4,00€uro
OUCH!
Which is one very, very good reason to stop shopping there…
The price of products at present in Lidle in Germany.
Here are some examples:
Eggs 10 Pack – €1,09
Sliced Bread – €0,49
Milk 1,5% Fat – €0,45
Beef mince 500g – €2,15
Bananas 1kg – €1,05
Gouda 400g – €1,89
Flour 1kg – €0,39
Yoghurt 4 x 150g 3.5% Fat – €0,35
Chocolate 100g – €0,39
Persil Washing Powder 70 washes – €12,99 on special €18,99 normally.
Lidl Brand Washing Powder 40 washes – €3,89
Lidl Brand Toothpaste – €0,39
Lidl Brand Cola – €0,39
I am sorry but these prices are too low. In Germany we have around 15% price-increase rate per year for your food.
And if you don´t like to eat `shit, you have to pay a lot more.
Here are my daily prices:
Buying locally, bio, but also in Aldi Sued and Lidl:
Eggs 10 Pack – €2,79
250 g Bread – €2,49
Milk 1,5% Fat – €0,85
Beef mince 500g – €4,99
Bananas 1kg – €1,69
Gouda 400g – €6,79
Flour( whole corn) 1kg – € 1,69
Yoghurt 4 x 150g 3.5% Fat – €1,29
Chocolate 100g – €1,69
Persil Washing Powder 70 washes – €12,99 on special €25 normally, stopped to sell big boxes, megaperls now are only for 16 washes € 3,99 on special
Lidl Brand Washing not buying
Toothpaste (Elmex) €1,99 on special
Cola not buying
Thank you Chris, but the price list above is what i pay for currently. It might be low according to your standard of living but that is all i can afford at present. But if i was in Greece i would be paying twice as much and earning a third as much.
@Aetos @Chris
you challenge me to go to sm around the corner and write down the prices for the same products. I can’t compare with lidl here because there is no branch nearby.
Certainly it’s one thing to buy food if you’re on tight budget and another thing if you can afford to buy in lidl-not.
I think it is time that people start protesting in front of the Supermarkets and blocking their entrances. Just as they are doing in front of the Greek Parliament and Government buildings.
Refuse to buy from the supermarkets.
Start buying from the farmers directly.
Shop from the small corner shops for your hygene and toiletries prducts, only. These small corner shops can give a better price and fairer price if they want to. Let them start the price war against the Big Chain Supermarkets.
We can put the pressure on the Supermarkets which are run by the rich and multinationals by going back to the basics. Just like our parents and grandparents did.
Bake your own bread, eat the basic essentials, for a while cut down on all the luxury items.
My grandparents grew and made their own food, my grandmother made her own soap also with which she bathed with and cleaned the clothes and plates with. They only went to the shop to only buy Inopnevma and Sokolatakia kai kamia karamela kai gia Kafe.
Then wait and see what happens.
Protest with silent action but also voice your opinion by telling them that you will not spend one more cent in their big shiny stores if they do not look after you the customer by lowering their prices.
Especially during these hard and difficult times in Greece.
They want to break our soul and spirit.
the problem with the small shops is that they buy from suppliers more expensive than the super market chains. Butter for examples, is 2.80-3E at SM and 4.30-4.6E in mini market or bakery. baker told me so. I try to support the small pet food shop around the corner but at the end of the month I pay 15 E more than if I would buy in SM (cat food & toilet sand).
The real problem here are the EU agricultural policies. These are directly responsible for creating butter-mountains, milk-lakes, wine-lakes, meat mountains, etc. And this enormous surplus is, instead of given to the needy as should be done, regularly sold in huge consignments to the like of supermarket chains etc. At vastly reduced prices of course. Hence cheap butter, milk, meat, etc. in supermarkets…
The other big problem is that food production is increasingly under corporate control, and the name of the game has changed from “providing food” to “making lots of money”.
So, indeed, do what you can for yourself. There is no need to picket supermarkets etc. Just stay away. They will get the message soon enough when the “footfall” drops. And use the time you save by not picketing places on in forming yourself and others. Here are 2 very good places to start:
“Not on the Label”, written by investigative journalist Felicity Lawrence. (Penguin)
and
“Shopped: The Shocking Power of British Supermarkets” Joanna Blythman ( Fourth Estate) This story holds for German, French, Greek, Belgian, and any other supermarket nationality you can think off..
The subject is still. Why are the prices in Supermarkets in Greece so much more expensive than other countries.
And as i have written above. It is not because of this and that, blah blah blah. It is simply because they are adding on very high profit margins.
I saw what product came in at what price and what we sold it for. And the supermarket had a good price from the supplier.
200% to 1000% PROFIT MARGINS.
Comparing prices and buying groceries from multiple supermarkets, purchasing food products from local farmers markets, buying directly from producers large quantities of foods with long shelf lives such as potatoes, rice, pasta, flour and olive oil and preferring store name products over brand name products can save consumers a lot of money.