In Greece, a number of factors are driving up prices, posing significant challenges for its citizens. The nation’s limited market size, unfair competition practices and the restricted market share of private labels, has contributed to the incessant rise in prices. In the year 2023 alone, a staggering 73.6% of Greeks found themselves paying more for their basic food needs, underscoring the gravity of the problem.
Market experts and economists delve into the intricacies of the Greek market, in an attempt to unravel the complexities behind its vulnerability to inflation and the persistence of high prices, especially in certain product categories. Their analysis reveals not only market distortions but also potential speculative phenomena and factors acting as formidable barriers to price reductions.
The small size of the Greek market and its geographical constraints hinder healthy competition among multinational corporations. The nation’s substantial reliance on imports, spanning raw materials to final products, further exacerbates the pricing challenges. Notably, self-sufficiency in key commodities like beef, pork, cow’s milk, and butter remains notably low, ranging from 20% to 60%, underlining the vulnerability of the supply chain.
Private label products, constituting a mere 23.4% of the market share, lag significantly behind other EU countries where this figure surpasses 40%. Adding to the cost dynamics are high taxes, including Special Consumption Tax and Value Added Tax, on various product categories.
Regarding food, declining agricultural production within the country, coupled with geopolitical shifts impacting the supply chain, has triggered price hikes in imported goods. This, in turn, escalates production costs, encompassing raw materials, fertilizers, agricultural supplies, animal feed, and energy.
As climate change looms, the agricultural sector faces disruptions due to natural disasters, further complicating the pricing landscape. Retailers also point to intricate intra-company transactions among multinational corporations, which contribute to the inflationary pressures facing Greek consumers.