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Greece Food and Drink Report Q1 2010Published by: Business Monitor International Published: Nov. 5, 2009 - 70 Pages Table of Contents
AbstractIn Greece, annual real GDP growth turned negative for the first time in 16 years in Q209, with theNational Statistics Service (NSS) posting a -0.3% y-o-y outturn. While BMI still expects the economicdownturn to have got worse in H209, the tentative emergence of the eurozone from recession, combinedwith the fairly mild downturn in Greece during H1, has led to a revision of the full-year forecast. BMInow expects the economy to contract by 0.6% in 2009, from a previous projection of -3.5%.Results published during the quarter from some of country’s largest food and drink players reflect animprovement in trading conditions. In August, Greek dairy producer Fage reported that it had swung backinto profit in the first half of the year, following two successive years of losses. In the six months to June30 the firm generated net profits of EUR6.2mn (US$9.1mn), which compares with a loss of EUR11.1mn(US$16.4mn) in the same period in 2008 and a loss of EUR11.7mn (US$17.2mn) for 2008 as whole. Thehealthy performance was driven by an improvement in gross profits and the positive impact from thereduction of a fine imposed by the Greek Competition Authority. However, net sales over the period fellby 3.9%, with the decline largely attributable to the economic downturn and less profitable sectors suchas feta and graviera cheese. In Greece, Fage is the market leader in the yoghurt, packaged cheese, UHTmilk and cream sectors. However, the level of competition means that over the last five years the firm'snet sales have stagnated while gross profit margins have declined. Notably, the drop in profitabilityreversed in the first half of 2009, with cost of sales as a percentage of sales falling and gross marginincreasing. This can be partly attributed to the global fall in raw milk prices, in line with the economicdownturn, which has constrained demand for dairy products in emerging markets. On the positive side,the firm continued to enjoy success on the export front, led by its Total Greek yoghurt brand. In the firsthalf of 2009 Fage's international sales increased by 3.6% in volume terms and 10.5% in value terms, duelargely to volume growth in the US and Italy, which offset a decline in volumes in the UK. Also during August, Greece-based soft drinks producer Coca-Cola Hellenic (CCH) announced that itsnet profit increased by 7% year-on-year (y-o-y) to EUR194mn (US$279.2mn) and its sales volumeincreased by 1% y-o-y to 593mn unit cases during Q209. CCH managing director, Doros Constantinou,said the company exceeded forecast figures despite the ongoing economic slowdown that adverselyaffected demand for soft drinks in key markets. He added that cost-saving initiatives and lowercommodity costs helped in achieving a strong operating profit performance in the quarter. Overall, Greek consumers are becoming increasingly adventurous when choosing food and drinkproducts. In the past, Grecians have not strayed far from their traditional diet of fresh produce, prepared athome and sourced locally, but this is gradually changing with Greek consumers increasingly opting forready-prepared items, presenting further opportunities for food and drink producers. Get Full Details About This Report >> |
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