ECONOMY

Chaos in domestic food industry calls for creativity, greater care

Some people are adamant: We are suffering through a period of expanding food crises. Yogurts are moldy, pulses and milk are sold as Greek while most of them are imported, and honey contains harmful substances. What happened to fling Pandora’s box open? Why has everything that the public ignored for years suddenly emerged in the last few weeks? In fact, the food crisis reflects the wider problems of quality and competitiveness in the Greek economy as a whole. As the food industry is the only «heavy industry» in the country, it stands in the middle of some chaotic scenery: in a standoff with retailing, and with the country’s Competition Commission imposing heavy fines. Chaos can be creative if it is somewhat controlled, but all indications show it is under no control; it is just in chaos. In North America, stores that sell Greek food have largely replaced products from Greece with similar ones produced in other countries. They sell «feta» cheese from Mexico and «Greek» canned food from North Africa. Florina peppers may be produced in Turkey and Kalamata olives may come from Morocco. Exactly what happens in the domestic market? There is little or no demand for potatoes at Nevrokopi and the market is full of imported ones. Domestic rice producers cannot sell their product while imported rice dominates the market. The first spontaneous response by the government to all this was «we must show the state is there.» This brought sanitary checks in imported agricultural products, inspections by the Competition Commission on pulses and possibly other products, and harsh fines on supermarkets because they earn more selling cheaper imported products. The state is here and protects the consumers, is the message. This policy may be useful for bolstering the image of a strict and uncompromising state, but goes nowhere near the heart of the problem. On the contrary, it may strip the industry and trade generally of their Greek character. Domestic products are expensive since they are produced at high costs. Multinationals’ products are expensive, too, but are sold in other countries at lower prices than in Greece. Similarly, local exporting industries sell their products at lower prices abroad. The easy solution might be to impose fines on everyone: Farmers, industries, traders, exporters and importers, for there is obviously some sort of collusive agreement among them all. The hard choice would be to impose some order on this chaos by systematically eliminating producers who add costs to the local production and by dealing with oligopolies in the domestic market. Inflation must be reduced without wiping out important sectors, as happened earlier with the apparel industry. Technology and new trade conditions are bringing more problems to the surface; managing these requires creativity.