ECONOMY

Food sector profits slip

The Greek food manufacturing sector in 2003 failed to live up to its reputation as the steam engine of Greek industry, sustaining a sharp decline in profitability despite a small rise in turnover, according to a sectoral study by Stat Bank. The total profits of the country’s 346 biggest food makers fell 15 percent from 345 million euros in 2002 to 293.6 million in 2003; total turnover rose 3 percent to 7.2 billion euros. Production and other key financial indicators in the sector, such as return on equity, deteriorated, although export performance was somewhat improved; 10 out of the 19 sub-sectors involved in the production and processing of foodstuffs showed reduced profitability. The study shows a tendency toward the emergence of two groups of firms: those that are maintaining and consolidating their presence both in Greece and abroad, despite market difficulties; and those that seem unable to stave off decline and have rapidly increasing losses. The total profits of the 272 profitable firms included in the sample rose 13.1 percent to 427 million euros; by contrast, the loss-makers saw themselves plunge 312 percent deeper into the red, to a total of almost 134 million euros. In other words, a small number of firms accumulated huge losses which blackened the picture of the sector as a whole. The study provides data on the distribution of profits per sector. The profit side is led by the five biggest coffee enterprises, whose combined profitability grew 5.55 percent to 82.8 million euros. Nestle Hellas, in particular, accounted for 27 percent of the total profitability of the 346 firms of the sample. The 30 firms in the fats/oils sector saw their profits rise from 37.1 million euros in 2002 to 43.6 million last year. In this sector, too, there was a concentration of profits, with the five biggest firms, Elais, Soya Mills, Soya Hellas, Minerva and Diem accounting for 97 percent of the total. The lion’s share went to Elais, whose profits rose from 20.6 million euros in 2002 to 29.1 million in 2003. Competition further intensified in the dairy products industry. Delta consolidated its dominant position with its two offshoots, Delta Milk and Delta Ice Cream, accounting for 60 percent of the total profitability of the 37 biggest dairy products makers. Its rival FAGE, though it realized the highest turnover, saw its profitability slowing down considerably. Other notable profit performers were Mevgal, Kolios, Tyras, Dodoni, Evga and Kri-Kri. Despite a fall in profits, the sugar product makers’ sector was in fourth position out of the 19. The sector’s 29 firms reported profits totaling 33 million euros, led by the Hellenic Sugar Industry and chocolate makers Pavlides and Ion. The catering industry’s 15 firms included in the sample reported a 69 percent surge in profits as a whole to 32 million euros. The 38 bakeries’ total profits rose 14.6 percent to 19 million euros. The most profitable were Papadopoulos Biscuits, Katselis and Nendos. Among the sectors with profit totals of more than 10 million euros were snacks and pasta makers, where Misko dominates. Melissa is another competitive firm, while Corona returned to profitability. Separately, Agricultural Development and Foods Minister Savvas Tsitouridis said after meeting with the board of the Association of Greek Food Manufacturers that «we shall continue our cooperation with a view to finding very specific solutions and attain very specific targets concerning the best possible promotion of our farm products and foodstuffs.»