ECONOMY

Small chains under pressure

Large retail chains and food industries yesterday provided assurances that they would show restraint in their pricing policies despite the rally in oil prices in recent months, Development Minister Dimitris Sioufas said. Sioufas was careful, however, to dissociate his briefings with industry representatives from the past practice of «gentlemen’s agreements» under previous governments. Furthermore, Sioufas claimed that price increases in necessities this year have on average been below inflation. The big retailers’ stance contrasted with that of medium-sized supermarket firms, which accused manufacturers of exorbitant hikes. «We shall try to hold prices back but the manufacturers have to realize that they must take profit cuts. Their hikes are unacceptable,» said Apostolos Alexakis, president of the Association of Supermarket Enterprises of Greece (SESME). Direct imports? His comments appeared to be mainly directed against the local subsidiaries of multinational companies, as Alexakis said that as of September 15 SESME members will begin direct imports from the parent companies in order to reduce prices. He claimed that the level of prices is on average 15 percent higher than in the rest of Europe, when «our wages are 30 percent lower.» Metro chain president Pantelis Panteliadis countered such claims, saying that competition is working and there is no trend of price increases or plans to that effect. He confirmed this during the meeting with Sioufas and his deputy, Yiannis Papathanassiou, saying, «No recommendations about prices were issued,» adding that high oil prices were justifiably cited for hikes in some cases – as in fresh produce – because they raised transport costs. For their part, food manufacturers’ representatives said their members’ price increases have been below the rate of inflation over the last three years. «We are careful about putting up prices due to the strong competition,» he said, adding that the intention was to absorb higher costs as much as possible. Dairy manufacturers said their price increases have been about the inflation rate, 3.8 percent, and that milk prices range between 0.69 euros per liter and 2 euros (for organic milk). Sioufas said the overall picture was «encouraging» as the market «almost in its entirety is operating smoothly and the rules apply.» He made it clear, however, that he does not intend to deregulate profit margins with respect to fresh produce.