Large multinationals stop or curtail production in Greece
Multinationals produce very few consumer goods in Greece nowadays. Companies prominent in their sectors have either stopped producing in Greece or dramatically cut back on production. As a result most products such as detergents, cleaning substances and broad-consumption cosmetics are imported. This has pushed retail prices to levels much higher than those in other European Union countries. Market experts estimate that this trend of diminished production in countries with relatively high labor costs is irreversible, since multinationals have embraced cost-cutting to remain competitive. This cost-cutting entails, in part, shifting production to low-cost countries. The price rises in several consumer products will be the subject of successive meetings between multinationals’ representatives and Deputy Development Minister Kimon Koulouris, the government’s point man in the fight against inflation. Koulouris has asked to see representatives of the Greek subsidiaries of Unilever, Colgate-Palmolive, Henkel, Procter & Gamble and L’Oreal. All these companies are among the leaders in their respective sectors, selling a large number of popular brand products. The Unilever Group has been active in Greece since 1960 through Unilever Hellas and Elais, the country’s largest olive oil producer. Unilever Hellas focuses on the production and distribution of detergents, cleaning products and cosmetics. In recent years, it has also absorbed ice-cream maker Algida since the latter’s factory, in the western city of Patras, shut down in November 1998. Early this year, Unilever stopped producing detergents in powder form. Its main production line now is chlorine, in which it has an estimated market share of over 70 percent. Unilever Hellas’s turnover for 2002 was 266.6 million euros and its pretax profit 26.2 million. The parent company is active in more than 80 countries. Procter & Gamble also entered the Greek market in the early 1960s. The parent company is active in 70 countries. In Greece, Procter & Gamble Hellas distributes a wide range of products, including detergents, personal and oral care products and children’s nappies. Many of its products are market leaders. Nowadays, it imports the totality of its products; it stopped production in the mid-1990s. In its last financial year, sales were 253.9 million euros and profits 13.9 million. Colgate-Palmolive has been active in Greece since 1962; a year later it build a small soap and toothpaste factory. Its products had been distributed in Greece since the 1950s; the distribution company, Olympia, continued its activity until 1974. Colgate-Palmolive is an important player in household cleaning and personal care products. It has started limiting production in recent years. Almost 50 percent of its turnover is from distribution. In 2002, turnover was 118.7 million euros and pretax profit 32.6 million. L’Oreal Hellas also has a 40-plus years presence in the domestic market. Its factory, which was shut down four years ago, turned it into the biggest local producer of cosmetics. The Greek factory used to export to Portugal, Austria and the Balkans. L’Oreal, like its parent company, is one of the strongest players in cosmetics; the parent group, however, is also active in pharmaceuticals.