ECONOMY

Government cracks down on wholesale, retail profits

The government is trying with all its might to keep a lid on prices and ensure that the recent decline in consumer inflation – whose annual rate dropped to 3.3 percent in August – will continue. The effort has, since July, been taken up by Deputy Development Minister Kimon Koulouris, a flamboyant figure who has been making the rounds of street markets, alternately cajoling and threatening producers and retailers to keep their prices low. Yesterday, Koulouris announced that more producers and enterprises will face either the prosecutor or the Competition Commission over profiteering practices. He also announced new agreements with individual companies or sectors to freeze prices and put caps on prices in several fruits and vegetables. After supermarkets, enterprises from the clothing and footwear and fast-food sectors, as well as from the services sector (bookstores, car repair shops) had agreed to freeze the prices of their goods and services. Koulouris made special mention of dairy company Friesland (which distributes the widely consumed Nounou brand products), which has agreed to freeze its prices until Autumn 2004. Koulouris asked Greek dairy FAGE to follow suit. «FAGE raised the prices of some of its products from 0.5 percent to 7 percent in July. I do not consider the explanation given for these price rises satisfactory and I call on the company to reverse the increases and adapt its prices to those of other (dairy) firms,» Koulouris said. Facing the music Koulouris has referred cigarette producers and importers to the Competition Commission for recently raising their prices 8 to 9 percent. He accuses them of acting in concert in doing so. Anticipating the Commission’s ruling, Koulouris promised «fines that will sting.» Other people who will face authorities are 20 operators of canteens in private hospitals who were found guilty of overpricing, tax evasion and breaches of the hygiene code. The operators will face a prosecutor. One wholesaler operating at the central Athens vegetable market, Giorgos Mantziavras, will also face the prosecutor for selling, in the space of three days, 14 tons of peaches and nectarines to street market vendors at a 300 percent profit, instead of the 10 percent prescribed by law. More wholesalers, of potatoes and tomatoes, as well as street vendors claiming to be producers, are also under investigation, Koulouris said. Limits on profit The deputy development minister also announced that profit limits will be imposed on potatoes, citrus fruits, apples and pears to prevent price-gouging. Wholesalers’ profit is limited to 7 percent, while retailers can make 22 to 25 percent. Besides imposing limits, Koulouris also wants to be informed in advance of price changes. Thus, producers and retailers with an annual turnover over 7.3 million euros must inform the ministry 30 days ahead of any price change. The same obligation is imposed on services companies with annual sales of over 3 million euros or producer-services companies with sales over 5 million.