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This is how the multinationals inflate prices in Greece

This is how the multinationals inflate prices in Greece
This is how the multinationals inflate prices in Greece

With new and old “weapons” the Ministry of Development is trying to shoot down the “rockets” of precision in food and daily essentials, at a time when consumers receive a new attack on family budgets from higher prices on energy bills and without to be able to count on the defense “iron dome”, since the budgetary margins are narrowing.

Strong fines

The tactic of multinational giants to price their products at higher prices in Greece compared to other European countries with much greater purchasing power has long been targeted by the services of the Ministry of Development, with the Kostas Skrekas to state that “it is a perennial problem that we are determined to tackle,” adding that “if the audits prove to be fraudulent, there will be very strong fines that we will not hesitate to announce.”

Certified controls

Already, according to secure information, the first investigations, which concern the cost data for specific categories of basic products, are in the completion stage. It is estimated that at the end of next week these investigations, in the first phase in the sectors of detergents, cleaners and personal hygiene and care products, will have been handed over to the minister.

In particular, the services of the Ministry of Development in the controls for compliance with the provision on the ceiling on the profit margin “dust off” product categories where the share of multinationals is strong. And if “bells” ring, such as the more expensive pricing in Greece compared to other European countries, explanations are requested. Whereas if a violation of the profit margin ceiling is found, fines are imposed.

According to the information of “Vima”, the audits to date have resulted in serious findings for some multinationals, regarding the non-compliance with the ceiling on the profit margin.

In the center

In addition to the controls of the Ministry of Development, the multinational companies, which hold a dominant position in the Greek market, will also be confronted by the Competition Commission, which is also thoroughly dealing with the matter.

In addition, within the next period, specifically in December, the publication of comparative price surveys for multinational products sold in Greece and in other European countries is expected, as was done with detergents.

According to the research in question, in Greece laundry detergents are sold up to 361% more expensive than in the EU’s cheapest market, which is Ireland. The independent Authority compared the prices in Greece and in other European countries of a series of products (powder and capsules) of the companies Unilever and P&G, the multinationals that gather the highest market share in the category in question in the domestic market.

In fact, the president of the Competition Commission, Mr. Ioannis Lianossuggested that the Commission take the initiative to publish the average prices of a series of the same products in the countries of Europe.

Baby milk

While the demographic collapse is literally becoming an existential bet for the future of our country, as there is now one birth for every two deaths, parents in Greece pay for infant milk from 13.4% to 43.2% more expensive than mothers and fathers in Spain, England, France, as well as in neighboring Cyprus.

And we are not talking about different products or different distribution channels, but about the same product of a leading multinational food industry that one finds on the shelves of the largest supermarkets in each country, including any offers.

At higher prices compared to other European countries with much greater purchasing power, a well-known toothpaste of a large multinational company is sold on Greek shelves, according to a price survey carried out by “To Vima” of prices in the online stores of supermarket chains in Greece and in four other countries (United Kingdom, Spain, France and Cyprus). For example, in relation to France, the aforementioned toothpaste (75 ml package), which actually holds a significant share in our country, is sold 34.2% more expensive.

Not only is raising babies more expensive, but also personal hygiene. A well-known foam bath of a multinational company is sold in Greece for 8.75 euros per liter when in Spain the same product is 16.9% cheaper. Bitter realization: In Greece, this particular product is sold in most supermarkets at a discount price! Otherwise the percentage difference would be much greater.

The only multinational product in which our country does not compete in accuracy compared to the other four is butter. But we are still “beaten” by the United Kingdom and France.

The methods

The methods applied by the multinationals to “inflate” the prices of the products in the Greek market by controlling 60% of the mass consumption products (food, detergents, household items, etc.), are neither hidden nor new.

The overpricing and underpricing of goods and services in such a way as to minimize the overall tax burden of the parent group, the imposition of high royalties on companies within the same group, high interest rates on loans from the parent to subsidiaries and the purchase of raw materials against expensive prices from commercial group companies based in other countries are the most well-known tactics used to raise the cost of products sold in countries where the multinationals do not have a productive but only a commercial presence.

Offers and purchasing behavior

A new “tool”, the Price Comparison Observatory, is in the stage of implementation, which will record the prices not point by point but on an annual basis in order to make a fair valuation. And the reason is the offers.

Manufacturers and retailers trying to become even more competitive, intensifying their promotional actions, with the result that 7 out of 10 products are now on offer, mostly quantitative.

The purchasing behavior of Greeks seems to be significantly influenced by this intense promotional activity, as 1 in 2 states that they may change their choice not only at the product level, but even at the store level, in order to achieve the best purchase.
The role of finding the real sale price will be taken by the Observatory.

The “permanent reduction” initiative

Of the 18 companies that participated until October 25 in the “Permanent Price Reduction” initiative, the much-discussed “tag” of reduced price by at least 5% and for a period of no less than six months, only 3 were multinationals.

Of course one of them, P&G, had the most codes on the list of 233 codes for which the companies committed in writing to maintain the lowest price for the next six months.

The article is in Greek

Tags: multinationals inflate prices Greece


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