Greece: new measures to combat high prices

The Greek Ministry of Development talks about the successes achieved in the fight against rising prices and announces new measures to support buyers.

The fight against rising prices, the ministry emphasizes, does not stop, despite achievements achieved over the past ten days – the measures already taken are working to stabilize and curb price increases. Three days later, on March 11th, World Consumer Day is celebrated, and new measures to support customers are expected to be announced by this date. They relate to the electronic platform of the consumer market. It is being modernized, becoming more comfortable, and more importance is being attached to online supermarkets.

According to available information, consumers will be able to check between 3,000 and 3,500 product codes, new and updated, while the process of adding as many codes as possible continues. In the coming period, as part of the increase in codes, emphasis will be placed on the ability to read them directly from the website of each online store.

In the very near future, the necessary ministerial decision will be issued on the mandatory placement of barcodes by all online stores, including grocery stores, for transparency and automation of data collection. The e-consumer will have the ability to compare carts and find the cheapest network closest to them, as well as the ability to make individual purchases across more than one chain for even greater savings.

Once the app is updated, a promotional campaign will be launched to inform consumers about the benefits they can get from using it during the price comparison process. This platform reminds CNN Greece is already a valuable tool for resolving complaints when it identifies violations.

Particular importance is attached to strengthening the consumer movement and the process of clarifying the details of consumer organizations contained in the Register of Consumer Associations (M.E.K.), their obligations to maintain accounting records, update their information and remove them from the register. The process is expected to be completed by April 30, 2024.

And about price reductions. Government measures to combat rising prices have come into full force since the beginning of the month, and, as Development Minister Kostas Skrekas said, the average reduction in individual products has already occurred and fluctuates around 15%. The Minister stated:

“We have seen an increase in prices for household cleaning products, detergents, personal hygiene products, baby diapers, baby milk under 3912 codes. We don’t calm down and say we’ve solved the problem. The rise in price, the fight against it continues, but Greece has taken the most decisive measures to solve this problem.”

CEO ΙΕΛΚΑ Lefteris Kiosses, in a conversation with APE-MPE, emphasizes that the state has put forward a number of legislative acts aimed at limiting inflationary pressure, especially in food product categories:

“Over the past 3.5 years, more than 25 legislative acts have been recorded that in one way or another regulate the market, such as the consumer basket, products with constant price reductions, and a ceiling on gross income. profit margins, and now new measures against proposals.”

Speaking about measures against offers, Mr. Kiosses emphasizes that the latest regulation concerns two measures aimed at reducing offers, promotions and discounts, given that this will lead to a reduction in the original prices of products:

“It is of course unclear whether this will affect the final prices of products and overall the final costs of consumers, since the consumer is ultimately interested in how this will affect his income.”

The first measure concerns a reduction of discounts by 30%. With this measure, the 50% discount offered by the supermarket supplier should be reduced by 30% and the list price should be reduced to 15%. This measure may reduce initial product prices, but may discourage businesses from continuing to promote with the same intensity.

The second measure concerns a ban on those suppliers who raise prices to carry out promotions for three months on those products for which their prices have increased. According to Mr. Kiosse, this measure is also expected to have a discouraging effect on price increases and the intensity of promotions, but at the same time may lead to other changes in the market. For example, if a product is selling poorly, the company will not have the tools to correct the situation or perhaps impose higher markups to compensate for the possibility of increased sales through promotions.

When asked to comment on the results of the new measures to combat price increases, the President of the Union of Small and Medium-sized Supermarkets, Yiannis Pilides, emphasized that, as follows from the new price lists for personal hygiene products, detergents and household care products, prices are lower. Basic list prices have been reduced by 5–10%, and for some products – up to 40%. On average they decreased by 20%. As for baby food, it has been reduced from 5% to 15%.

He notes that the new price lists have reduced prices for personal care, cleaning products and home care products, but not all companies have retained the same offerings, resulting in differences that consumers will notice on the shelf. He admits that “most personal care, cleaning and household products companies have reduced their price lists, but what the consumer cares about is not whether the list prices have been reduced, but the final price on the shelf.”

The president of the association expresses satisfaction with this measure, noting that this is what the market wanted: “This is a measure we have been asking for for many years. This is a positive direction and we believe it will pay off over time.”

In Greece, the practice of promotions is particularly intense. According to the latest ΙΕΛΚΑ study, the average consumer savings from offers in 2023 was 13% of total spending, a constant percentage compared to previous years but an increase from the previous decade. In practice, the total cost of these actions corresponds on average to benefits approaching €400 per year, including increased household costs due to inflationary pressures. In total, average savings per household are estimated at more than €3,000 over the past 8 years, and total savings over 10 years exceed €12 billion.

The majority of consumers (52%) believe that offers and discounts at retailers help them cope with rising prices. If in 2017 74% of respondents were “hunted” for offers and discounts in the supermarket, then in 2021 this percentage was only 58%, increasing in 2023 to 63%. This development of events reflects the need of buyers to save money during this period.

43% of the population believe that by searching for and selecting deals and discounts, they have the opportunity to both increase savings and tailor to their personal money-saving needs. On the other hand, a significant portion of consumers may not have the energy or time to take full advantage of discount promotions and therefore prefer lower prices.

According to a consumer survey by ΙΕΛΚΑ, the measure that will most help cope with price increases is to reduce ΦΠΑ for basic goods, according to 81% of the population.

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