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Greece Food and Drink Report Q1 2008Published by: Business Monitor International Published: Feb. 20, 2008 - 73 Pages Table of Contents
AbstractGreece was hit by two price fixing scandals in 2007 which have increased public distrust of largeorganisations and raised the perception that rising prices in the food and drink sector are the result ofproducers collaborating to form price fixing cartels. This news follows the arrest in 2006 of PanayotisAdamopoulos, the director of the Hellenic Competition Commission, who was charged with attempting toextract a EUR2.5 million bribe from MEVGAL, a major dairy firm which was being investigated overprice fixing allegations. Greece is currently ranked the most corrupt country in the 15-eurozone area byglobal anti-corruption watchdog Transparency International.In December after a year-long investigation the Greek competition authority imposed fines ofEUR48.3mn (US$71.0mn) on seven dairy processors for fixing the prices paid to dairy farmers. This wasquickly followed by further fines totalling EUR28.6mn (US$42.0mn) for four dairy companies and sixsupermarkets for fixing the retail prices of dairy products. These latest revelations have added towidespread public distrust of large organisations and a growing perception among the local populationthat a large number of Greek companies operate price-fixing cartels. This has been the centre of publicdebate and the focus of newspaper campaigns as rising costs of living and inflationary pressures arealready putting a squeeze on consumers. Greece’s largest food and drink company Vivartia, which has interests in dairy, baked and frozenproducts was hit with a fine of EUR21.8mn (US$32.0) for its part in the price fixing scandal and is one ofthe focal points of the public’s rising objection to large companies. Vivartia’s position is not helped bythe fact that it is controlled by foreign owners, having been bought in the summer of 2007 by the MarfinInvestment Group (MIG) which itself is owned by the Dubai Investment Group (DIG), a globalfinancial investment vehicle of the Dubai government. MIG has been the focus of concern in Greece,where any company consolidation is generally viewed with suspicion - an understandable sentimentfollowing the recent price fixing revelations. Sections of the Greek population are also concerned thatsuch a large and strategic company is controlled by foreign owners - a sentiment which has forced MIGto stress its Greek connections, running full-page adverts in the local media under the motto MIG - MadeIn Greece. Rising public distrust of large organisations is bad news for an increasingly mature food and drink sector.Any company that wishes to flourish in a mature market needs to have the backing of the general publicand price fixing is one of the most objectionable activities for a population which is already struggling tocope with rising food inflation. In BMI’s opinion this sort of activity not only harms the company’sinvolved but also damages the reputation and prospects of all large food and drink firms operating inGreece. Get Full Details About This Report >> |
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