The accuracy continues to cause “headaches” in Greek households, which is particularly evident on the supermarket shelves despite the downward trend of inflation in the country, with consumers limiting their purchases to basic food items, choosing mainly based on the low price.

At the same time, the government reserves high fines for those found to be profiteering, while thousands of codes are checked every day at all stages of the marketing of products and services. In this context, Mr Minister of Development, Kostas Skrekas has pointed out that checks continue at an intensive pace, every day, and fines are imposed on anyone who cheats. In fact, according to him, DIMEA has imposed 5.5 million fines for profiteering in one month.

Greek consumers are pessimistic

As can be seen from the results of his economic situation survey Foundation for Economic and Industrial Research (IOBE) the consumer confidence index fell sharply in September and stood at -45 points, from -28.6 points in July. The new government term seemed, according to IOBE, to have reduced any uncertainties and ensured stability for the coming years. However, the end of the tourist season, the continuous price increases and the high cost of living, as well as the natural disasters with incalculable damages that took place recently had a catalytic effect on the expectations of Greek consumers. The index is moving at low levels now, with the result that Greek consumers appear to be the most pessimistic in the EU. In addition, 64% (from 42% in July) of consumers predicted a slight or noticeable deterioration in the country’s economic situation, compared to 21% which expects stability. 59% (up from 53% in July) of consumers predicted they would spend less or much less. Regarding estimates of the current household financial situation, the percentage of consumers who say they are “just getting by” stood at 57%, while to 14% from 10% the percentage of those who report that they draw from their savings increased. Consumers who said they save a little or a lot make up 20% of the total, while the percentage of those who said they are “in debt” was 9%.

At the same time, the effect of inflation on the consumption of products in supermarkets is evident. According to the data of the company Circana, in the seven months January-July 2023 the value of sales of the consumer products market amounted to 5.152 billion euros, marking an increase of 9.8% compared to the corresponding period last year, of which 3.925 billion euros concern the food categories. However, sales volume increased by just 0.6%. A big winner in the seven-month period due to strong inflationary pressures is the private label category despite the fact that prices are higher than branded ones. The share of the specific category in value was 26.2% from 25.4% in the corresponding period of 2022, with the growth rate being 13.3%, while in branded it is 8.6%. In fact, in food, the share of private label products was 26.5% from 26.1% in the corresponding period of 2022. Promotional actions continue unabated with 25.2% of the value of FMCG sales having been made under offer regime, a percentage increased by three points compared to the corresponding period last year. Especially in the food category, the corresponding percentage amounts to 25.1% from 21.6% last year.

Margin audits in full swing

The control of 5,000 product codes regarding compliance with the law on the ceiling on the gross profit margin is in full progress by the Ministry of Development. The controls concern large multinational companies selling cleaning products, personal care products and even olive oil, Development Minister Kostas Skrekas said in an interview, pointing out that the ministry will continue to punish those who violate the law.

He recalled the recent fine imposed on a large multinational company for violating the ceiling on the profit margin on school supplies and stressed: “We will continue to punish those who violate the law. We don’t want to drag out the companies, but for everyone to understand that the law will be applied.” The controls have an indirect effect on the market and will continue, emphasized Mr. Skrekas and added: “We are taking tough measures to intervene in the functioning of the market that no other European country has taken. These measures have led to a reduction in general inflation and a de-escalation of food inflation in the last two months.”

Answering a question about the possibility of reducing the VAT, he repeated that the measure, where it has been applied in Europe, has not worked. “It turns out, he said characteristically, that where the VAT was reduced, the benefit did not reach the consumer, but went to the pockets of the intermediate links in the supply chain.”

Measures to address accuracy

In fact, it is the biggest problem faced by Greek households, the government has already taken measures to deal with it effectively. These include reducing prices on the shelf, strict control over pricing in suppliers and the supply chain, notification of new supplier price lists, from supermarkets with a turnover of more than €90 million, while further strengthening the control mechanism.

For their part, the food industries, one after the other, prepare their new price lists for price reductions of 5% and above and for a period of at least 6 months, in exchange for their display on the shelves with a special label. Already well-known industries have announced that they are proceeding or will proceed, immediately, in price reductions in certain products and competition is expected to be strong.

“I think that many industries will follow, because in practice food to a large extent has promotional actions, that is, they have discounts” as the president of the Association of Greek Dairy Products Industries, Christos Apostolopoulos, stated on the subject, speaking to journalists.

According to journalistic information, the measures against punctuality recently passed by the Parliament are expected to be activated by the end of October and within the next few days it is expected that the Ministry of Development will begin to be informed of the new lists of products that will have ” permanent” price reduction of more than 5%. However, the supermarkets still have a lot of bureaucratic work to do as they will have to send their supplier lists when they change as well as the price lists of fruit and vegetables, in order to then be published.

However, in principle, the ministerial decisions on the specialization of the measures are expected to be published. It is noted that the measure of “permanent” price reduction on the shelf in excess of 5% and for a period of at least six months, is optional and the Ministry of Development must determine the product categories, the amount of the price reduction and the duration of the reduction, for the industries to proceed with the information.

According to the planning of the ministry, the measure will include all the categories that fall under the household basket, as well as some additional ones. That is, dairy products, cheeses, cold meats, coffees, cereals, detergents and basic personal hygiene items as well as soft drinks, beers, etc. However, more expensive products such as coffee capsules.

It is noted that the Ministry of Development is preparing a specific list for fruit and vegetables, which will be modified according to the season, while the prices will also be posted on the e-katanalotis platform.

Olive oil and bread at the center of controls

With regard to the increase in the price of olive oil observed on the shelves of supermarkets, the Minister of Development announced that letters have been sent to all major olive oil standardization companies and the gross profit margin is being checked and he emphasized: “If we find that these major companies make more profit in 2023 than in 2021 will be very severely fined.”

In the framework of the dialogue of the Minister of Development with suppliers, retailers and industry bodies on the subject of prices, a meeting was recently held with the Federation of Bakers of Greece, in the presence of the general secretary of Trade and Consumer Protection, Sotiris Anagnostopoulos. During the meeting, the Ministry of Development informed the Federation of Bakers of Greece that DIMEA systematically checks the gross profit margins in the flour industry sector and that, in the event that cases of unfair profit in the flour categories are found, severe fines will be imposed. It was asked to keep bread prices stable for consumers and the industry’s standing request to use the term “bakery” only for businesses that complete the whole bakery product production cycle in-house, from the processing of raw materials to the final baking of them.