Measures announced on Wednesday by Development Minister Kostas Skrekas received a more-or-less positive reaction by retailers and suppliers in order to address surging food prices.
However, there is division on the 30% reduction in discounts and the 3-month promotion ban on revalued products. Concerns revolve around potential impacts on profitability and future promotional activities. Supermarket chains fear these measures may deter multinational companies from the ‘buy one, get one free’ practice, negatively affecting consumers in the long run.
Nikos Karageorgiou, the Vice President of the Industrial Association of Attica and Piraeus and the President of the Hellenic Association of Industries of Branded Products (ESVEP) while supporting the need for government intervention believes that there are difficulties in implementing the measure that proposes a 30% reduction in discounts from suppliers. He also opposes the prohibition of offers for a period of 3 months on products undergoing price increases.
“Cost structures are unforgiving. Let us be cautious not to be led into detrimental practices, as it undermines businesses’ ability to grow and provide quality services,” he emphasizes.
Regarding the choice of March as the timeframe for implementing the measures, market factors explain that it was necessary as there is a large stock of products invoiced under the previous regime.
The development minister announced the implementation of the four following measures:
Reduction of benefits to supermarkets: Suppliers’ total discounts are limited by 30%, resulting in a corresponding decrease in the prices of these products on the shelves.
Prevention of unjustified price increases: Suppliers who raise the prices of products are not allowed to implement promotional activities for the products that have been price-increased for three months.
“Net” prices from the field to the shelf: Suppliers are obligated to sell products to retailers at “net” prices.
A cap on the gross profit margin is set for the selling prices of infant formula in Greece.